Following in the footsteps of groundhog Punxsutawney Phil, analysts from Fitch Ratings and Morningstar weighed in with these P/C insurance market forecasts in the past week:
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“Fitch Ratings expects the U.S. property/casualty market to continue softening in 2026, with increased competition, abundant capital and downward pricing pressure.
“Despite the high number of litigations and escalating payouts, the U.S. casualty insurance market is still an attractive market because of its size, product and regiona
l diversity, and pricing flexibility,” according to Morningstar.
“We expect casualty insurance pricing to remain divergent from the rest of the P&C insu
rance market in the near term,” said Victor Adesanya, Morningstar’s Senior Vice President, Global Insurance & Pension Ratings.
“Overall, we do not anticipa
te softening rates in the P/C market to pressure credit ratings, as most insurers benefit from diversification in their product mix and geographic footprint and ca
n still increase their casualty insurance rates.”
“Insurers will face slowing revenue growth given the easing rate environment amid m
acroeconomic uncertainty,” Fitch says.
In property-catastrophe reinsurance, softening market conditions will “continue at the midyear 2
026 renewals in April (Asia-focused) and June/July (Florida).”
Read what insurance
executives are saying in the related article, “Insurance Groundhogs Warming Up to Market Changes.”
Personal Lines: Shopping and Switching
Separately, J.D. Power provided an early read on whether America’s drivers and homeo
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wners will stay put with their insurers this year or switch to competitors for lower prices.
For the most part, shopping and switching rates were down slightly in the fourth quarter of 2
025 except for residential property owners and renters, who are increasingly shopping but
not switching carriers, according to latest Loyalty Indicator & Shopping Trends (LIST) report from J.D. Power, conducted in collaboration with TransUnion.
The most notable change evident from the figures in the report relates to policyholders shop
ping for new renters insurance. Those customers switched much less frequently in fourth-quarter 2025 than they did in prior time periods.
Averages compiled by Carrier Management from monthly shopping and switching percentages shown the LIST report reveals these findings:
Auto insurance: Both shopping and switching rates are down. The overall fourth-quarter 202
5 shopping rate was 13.0%, down 0.2 points from third-quarter 2025 and 0.4 points from fourth-quarter 2024.