What we have observed in June renewals
June renewals were favourable for quality metro and non-CAT property schedules, especially where values are current, maintenance is documented and loss history is clean. Excess capacity continues to drive a renewed willingness to compete for high-quality risks, producing favourable renewal outcomes including greater flexibility around programme structures, higher available limits, and in some cases modest premium reductions. The market remains more cautious for flood, cyclone, bushfire, Expanded Polystyrene (EPS), cladding, lithium battery and poorly maintained assets, reflecting ongoing concerns around loss volatility and climate exposure. That said, substantial capacity remains available from Lloyd’s of London markets based in Singapore and London.
Across Asia-Pacific, similar dynamics are emerging, with insurers deploying additional capacity into the commercial property sector and supporting both new placements and renewals. This increased competition is giving large property owners more options and enabling more tailored risk financing strategies.
The outlook for the remainder of 2026 is relatively steady. While competition and capacity are expected to persist, outcomes will remain highly differentiated. Well-managed, lower-risk assets with strong risk profiles and current valuations are likely to benefit from continued competition and improving terms.
Premium pricing trends
Pricing has largely plateaued for well-performing assets and is soft to flat for quality risks, correcting upward for catastrophe-exposed or underinsured risks. A reasonable planning range is flat to -10% for strong risks and +5% to +15% for CAT-exposed, poor-loss-history or undervalued assets. The focus for larger portfolios is increasingly on optimising the total cost of risk rather than simply transferring it, with more structured and multi-layered insurance solutions becoming more common.
Insurer behaviour
Insurers are competing for clean property but remain rational on natural catastrophe exposure and valuation adequacy. The market is not ignoring CAT risk; it is applying more granular selection. Despite the more favourable environment, underwriting discipline remains firmly in place, with insurers placing greater emphasis on asset-level risk quality including construction type, maintenance standards and risk mitigation measures. Climate-related exposures continue to play a significant role in pricing and coverage decisions, while residual pressures from construction costs and claims inflation still influence how risks are assessed.
Claims trends
Whilst the market remains competitive, property owners should not be distracted by what remains the most critical element of their insurance programme — claims outcomes. Claims remain dominated by natural catastrophes, storm and flood, water damage, rebuild inflation, labour shortages and underinsurance. KPMG’s 2025 figures of $4.5B of natural hazard losses across 289,435 claims remain a useful reminder that insurer profitability has not removed physical risk.
We are seeing the impact of sustained construction cost inflation flowing directly into claim settlements, with reinstatement costs consistently exceeding pre-loss estimates and, in some cases, the declared sum insured itself. Underinsurance continues to present itself as an issue during claims time with concerning regularity. The gap between declared sums insured and the true replacement cost has been widening since 2021. Many property owners are yet to commission updated valuations which reflect the current cost environment. Where co-insurance provisions apply, the financial consequences in the event of a claim can be severe and are rarely anticipated by policyholders.
Extended rebuild periods are also placing pressure on business interruption and loss of rent claims. Indemnity periods which may have been sufficient historically, in a more predictable construction environment, are proving to be inadequate in practice, leaving property owners to absorb uninsured revenue or rental losses beyond the policy period. Early engagement with your risk advisor on both the issue of valuation adequacy and indemnity period is becoming increasingly important. See also our commentary relating to claims arising from non-compliant cladding.
Legal and regulatory developments
Cladding and building defect decisions remain relevant for property, strata and construction interfaces. Budget housing and tax changes may also influence transaction volumes, investor demand, asset values and valuation adequacy.
AI and technology impact
Insurers are increasingly using geospatial data, climate analytics, flood mapping, satellite imagery and engineering data to price and select risks. Policyholders with weak asset data are at a disadvantage.
What policyholders should do now
Refresh declared values, test catastrophe deductibles, obtain current valuations, document maintenance and resilience works, and use competition to improve sub-limits and cover extensions rather than simply reduce premium. More exposed or complex risks, especially those with catastrophe exposure, will continue to attract closer scrutiny. The owners of such assets will be best served by ensuring early engagement, clean risk presentation and a clear view of their potential claims exposure.
Continue reading our full range of market updates:
- Insurance Market Overview: July 2026
- Claims
- Workplace Risk
- Corporate and Multinational Risk
- Construction, Property and Development
- Financial Lines
