The catastrophe wind market is one of the most aggressively softening segments within the excess and surplus (E&S) lines property market, with rate decreases in the 20% to 30% range becoming “increasingly common”, according to wholesale insurance services provider CRC Group.
“Capacity levels are at historic highs, with markets eager to deploy limit despite pricing continuing to decline. For instance, rate decreases in the 20% to 30% range are increasingly common, making CAT wind one of the most aggressively softening segments within the property market,” CRC Group said.
Of course, in the current 2026 landscape, capital abundance and a softening reinsurance market are primary drivers of insurers’ ability to write more at lower rates.
This influx of reinsurance capital essentially acts as a lower-cost substitute for primary capital; by offloading risk to a softening reinsurance market, primary E&S carriers are able to expand their underwriting capacity and maintain higher limits for clients at a lower overall cost of capital.
This shift is supported by CRC Group’s observation that treaty reinsurance pricing has declined for two consecutive years, and insurers have experienced strong profitability over the past three years, aided by the absence of major U.S. commercial hurricane losses.
At the same time, while recent wind events have generated meaningful personal lines and NFIP losses, they have largely spared the commercial cat wind sector.
“Combined with an influx of new capacity, this has intensified competition, particularly on accounts that historically carried higher pricing. As a result, deals are coming together quickly, often becoming over-subscribed early in the placement process, as incumbents work aggressively to retain their positions,” CRC Group explained.
CRC Group also noted that geographic distinctions continue to influence underwriting and capacity deployment within the catastrophe wind market.
Referring to Northeast U.S., the firm emphasised that the region presents greater opportunity for standard markets to participate in cat wind placements, reflecting lower hurricane frequency and loss experience.
While in the Southeast and Gulf Coast regions, which includes Florida, capacity reportedly remains abundant, however participation may become more selective, with fewer markets offering meaningful limits compared to prior years.
Meanwhile, the 2026 earthquake market continues to be heavily influenced by MGA capacity, mirroring trends seen in other cat-exposed property segments. Deductibles remain the primary tool for managing aggregate risk
“MGAs remain the primary source of deployable earthquake capacity, which is both from new entrants as well as expanded capacity from existing markets, with some able to offer hundreds of millions of dollars in limits on a single risk. This concentration of capacity has increased competition and placement efficiency, particularly for risks that align well with established underwriting guidelines,” CRC Group explained.
Adding: “Underwriting remains structured and formulaic, with MGAs applying defined parameters around construction type, building characteristics, and occupancy. Risks that fall outside of these guidelines may require alternative solutions or layered structures. Despite increased capacity and aggressive competition, earthquake deductibles have remained relatively stable and consistent by region, showing far less volatility than CAT wind deductibles.”
In California, earthquake deductibles have remained largely unchanged, typically holding at approximately 5% with lower options available on more favourable risks outside of heavily aggregated areas. While in the New Madrid zone, earthquake deductibles have historically remained lower, typically holding around 2%, and according to CRC Group, this trend is expected to continue.
Additionally, the Pacific Northwest market continues to reflect stable underwriting norms, with earthquake deductibles generally holding at approximately 3%.
Lastly, CRC Group’s report also noted that wildfire conditions observed in 2025 have carried over into 2026 across the commercial property market, with underwriting discipline and aggregate management continuing to drive carrier behaviour more than pure rate movement.
Whilst California remains the most capacity-constrained state across the U.S., wildfire concerns are also expanding into other Western and Mountain states as carriers reassess catastrophe exposure and deploy aggregates more conservatively.
“That said, an influx of new capacity and year-over-year budget targets among existing markets are creating a more competitive environment within the E&S space. Although the wildfire segment is not softening at the same pace as the broader property market, many wildfire-exposed accounts are achieving improved overall pricing, increased capacity, and stronger terms and conditions compared to prior years,” CRC Group said.
