The Numbers Behind the Shift
If your commercial property insurance renewed in the past six months and the premium came in lower than expected, you are not imagining things. According to the Marsh Global Insurance Market Index, U.S. commercial property rates declined by 10 percent in the first quarter of 2026. Aon’s Q2 Property Market Dynamics Report puts the figure even steeper: an average rate change of negative 15.1 percent across all account types, marking the eighth consecutive quarter of declining rates.
For shared and layered programs, the reductions have been more aggressive, averaging negative 20 percent. Some accounts with clean loss histories and desirable occupancies saw renewals come in 25 to 35 percent below the prior year.
This is a buyer’s market by any reasonable definition. The question for business owners in Seguin and across Central Texas is whether they are using it as one.
What Is Driving the Decline
Three factors are converging. First, 2025 was a relatively benign year for catastrophic losses. Hurricane activity stayed below average, severe convective storm losses were moderate by recent standards, and wildfire exposure, while still significant in the West, did not produce the kind of industry-level losses seen in 2017 or 2023. Insurers took in more premium than they paid out, and that profitability created competition.
Second, global reinsurance capacity hit a new high. Reinsurers — the companies that insure insurance companies — had strong treaty renewals with reduced pricing, which filtered down into the primary market. When reinsurance costs less, carriers can price commercial property policies more aggressively.
Third, competition among carriers intensified. With profits healthy and capacity abundant, carriers are competing for desirable business by lowering rates, broadening terms, and increasing available limits. Some markets that had pulled back from natural catastrophe zones in prior years have begun expanding coverage there again.
Lower Premiums Are Just the Starting Point
The instinct when a renewal comes in lower is to sign it and move on. That is understandable. But a soft market offers more than premium savings, and the business owners who benefit most are the ones who treat the renewal as a negotiation, not a formality.
Here is what is on the table right now:
Improved terms and conditions. During the hard market years of 2021 through 2023, many carriers tightened policy language. Strikes, riots, and civil commotion exclusions became more common. Water damage sublimits were reduced. Communicable disease exclusions became standard. In the current environment, many of those restrictive terms are negotiable. If your policy picked up unfavorable language during the hard market, now is the time to push back.
Higher limits at minimal cost. Carriers are competing on capacity. If your building value has increased — and construction costs suggest it probably has — you can often increase your coverage limits for a fraction of what the same increase would have cost two years ago. Aon’s data shows that carriers are expanding available natural catastrophe limits for many shared and layered programs.
Lower or restructured deductibles. Aon reports that 94.7 percent of commercial property clients maintained their deductible levels in Q1 2026, up from 90.7 percent the quarter before. But maintaining is different from optimizing. In a soft market, you may be able to reduce a percentage-based wind and hail deductible to a flat dollar amount, or lower your overall retention without a meaningful premium increase.
Reallocation toward liability and business interruption. This is the strategic move. Property rates are down, but liability remains under pressure. Litigation costs and claim severity continue to rise. If your total insurance budget is staying flat, the savings on property create an opportunity to close gaps in your liability, cyber, or business income coverage — areas where the market is not giving anything away.
What to Do Before Your Next Renewal
Start the conversation early. In a competitive market, your agent can approach multiple carriers and create genuine leverage, but only with enough lead time. Sixty to ninety days before renewal is not too early.
Review your building valuations. Construction costs rose 35 to 45 percent between 2022 and 2025. If your insured value has not kept pace, a lower premium on an inadequate limit is not a win. A soft market makes it cheaper to close that gap.
Ask your agent specifically about terms and conditions, not just price. The best renewals in this market involve broader coverage, not just lower cost. Ask what language has been tightened in recent years and what can be restored.
Look at your program as a whole. A property savings that funds better business interruption coverage or a standalone cyber policy is worth more than the same dollars sitting in your operating account.
The Window Is Real, but It Is Not Permanent
Insurance markets are cyclical. Every soft market eventually firms. A major hurricane season, a spike in wildfire losses, or a shift in reinsurance capacity could change the pricing environment within a single renewal cycle. Aon’s own forecast notes that less-desirable occupancies and loss-challenged accounts are already seeing smaller reductions. The window is widest for clean accounts right now.
The takeaway is straightforward: if you have not reviewed your commercial property coverage recently, 2026 is the year to do it. The market is offering more favorable pricing, broader terms, and increased capacity. The business owners who use this cycle to strengthen their overall program — not just reduce their premium — will be better positioned when the market turns.
Frequently Asked Questions
How much are commercial property insurance rates declining in 2026?
Industry data shows average declines of 10 to 15 percent in Q1 2026, with some well-positioned accounts seeing reductions of 25 percent or more. The magnitude depends on your loss history, occupancy type, and program structure.
Does this apply to homeowners insurance as well?
The soft market is most pronounced in commercial property lines. Homeowners markets are more variable, particularly in regions with high severe weather exposure. However, the competitive environment means it is worth reviewing your personal lines coverage as well.
Should I just take the lower premium and move on?
Premium savings are valuable, but a soft market also gives you leverage to improve policy terms, increase limits, lower deductibles, and close coverage gaps. The best strategy treats the renewal as a negotiation, not a transaction.
How long will the soft market last?
No one can predict market turns precisely. The current soft cycle is driven by low catastrophe losses, strong reinsurance capacity, and carrier profitability. Any of those factors can shift. The practical advice is to act during the current cycle rather than waiting.
What should I ask my insurance agent at my next renewal?
Ask about building valuations, any policy language that was tightened during the hard market, the cost of increasing your limits, deductible restructuring options, and whether savings on property can be reallocated to liability or business interruption coverage.
