TL;DR
- Commercial insurance has moved into a softening phase. After several years of rate increases, insurers and reinsurers are competing harder for well-managed business, and most lines are more competitive than in 2023.
- Lloyd’s has itself flagged that property rate softening is continuing faster than it considers comfortable, and has stressed underwriting discipline as pricing momentum moderates.
- For South African buyers, property, cyber and directors’ and officers’ liability are generally competitive, while professional indemnity has been steadier.
- Hard pockets remain: political violence, war-related marine, US-exposed casualty, distressed motor fleets, catastrophe-exposed assets, poor-loss accounts and complex construction or energy projects.
- The defining feature of 2026 is not blanket hardening, but sharp differentiation between well-managed risks (which get cheaper) and difficult risks (which do not).
Table of Contents
- The 2026 market at a glance: soft, not hard
- What is driving the softer market
- Rate movement is not premium movement
- How this translates for SA buyers, line by line
- Where the market is still hard in 2026
- How to make the soft market work for you
- Managing hard pockets when they hit you
- How Berkley Risk approaches 2026 renewals
- Outlook for 2026 and 2027
- Frequently asked questions
The 2026 market at a glance: soft, not hard
The commercial insurance cycle has turned. Across most commercial lines, the rate increases of recent years have given way to a more competitive market, and 2026 renewals for well-managed risks are generally more favourable than those of 2023.
Lloyd’s, the London specialist insurance market, has acknowledged the shift. Heading into 2026, it flagged that property rate softening was continuing at a speed it considered problematic, and stressed the importance of underwriting discipline as pricing momentum moderates (Insurance Business, 28 November 2025).
For South African commercial buyers, this matters because SA specialty capacity is closely connected to international markets and to global reinsurance capital. When those capital pools compete for business, that competition reaches South African renewals.
What is driving the softer market
Insurance markets move in cycles. The main forces behind the current softening are:
- More capacity. Insurers and reinsurers have more capital to deploy after several years of improved results.
- Competition for good risks. Carriers are competing to write well-presented, well-managed business.
- Rate adequacy. After years of increases, many lines are priced at levels insurers consider adequate, which reduces pressure for further rises.
- Selective appetite. Insurers remain cautious on risks with poor claims histories, weak controls or event-driven exposures, which is why the market is differentiated rather than uniformly soft.
Rate movement is not premium movement
Individual businesses often see premiums rise even in a soft rate environment. The total premium your business pays reflects more than just the rate insurers apply to your risk:
- Increased turnover, payroll or asset values
- Inflationary adjustments to sums insured (rebuild cost, contents replacement, revenue projections)
- Recent claims
- New locations, vehicles, activities or exposures
- Lower deductibles or broader cover added at renewal
- Valuation corrections after independent surveys
- Insurer-specific remediation of previously underpriced accounts
- Poor risk information at submission stage
If your premium rises but your sums insured and turnover have grown by more, the rate applied to your risk may actually have fallen. Understanding this distinction is central to reading renewal outcomes correctly and avoiding the assumption that a rising premium means a hard market.
How this translates for SA buyers, line by line
Property and business interruption
Property is one of the most competitive lines in 2026. Well-managed properties with good data, current valuations and clean claims records are attracting competitive terms. Property risks that remain difficult can still face significant scrutiny or increases where there are:
- Fire-protection deficiencies
- Flood or hail exposure
- Waste, recycling, food or chemical occupancy
- Inadequate declared values
- Poor maintenance
- Large single-site concentration
- Unfavourable claims experience
The correct message for property in 2026 is risk differentiation, not general hardening.
Cyber
Cyber has moved a long way from the sharp rate increases of 2022 and 2023. Buyers with strong controls (multi-factor authentication, backup discipline, endpoint protection, incident response readiness) are seeing more capacity and more competitive quotations.
Cyber softness is not permanent. Rising ransomware severity, third-party breach liability and AI-related exposures may eventually moderate it. Clients with weak controls, prior incidents or exposures in high-risk sectors can still face restricted cover, sub-limits or coverage refusal. That is risk selection, not a general cyber hard market.
Professional indemnity
Professional indemnity has been steadier than most lines, and outcomes depend heavily on:
- The profession (medical malpractice, financial advice, legal, engineering design)
- Retro dates, run-off requirements and continuity of cover
- Contract wording and exposure to fitness-for-purpose obligations
Berkley Risk covers PI in detail in our article on professional indemnity for engineers and consultants.
Directors’ and officers’ liability
Directors’ and officers’ liability is generally buyer-friendly, particularly for well-governed listed and private companies.
Casualty and public liability
Casualty pricing is being held up mainly by US-exposed liability. Pure South African casualty risks without US exposure are more moderate. Businesses with US operations, US customers or US-facing product exposure should expect a different market to those without.
Motor
Motor is generally stable. Distressed fleets, poor claims experience or high-mileage commercial operations can still face material rate action or restricted capacity.
Construction and engineering
Construction insurance is generally more favourable than in recent years, with pressure concentrated in specific segments. South African construction risks that remain difficult include large CAR/EAR with complex risk profiles, tunnelling, mining, prototypical technology, projects with weak risk controls, and those with material claims history. Across-the-board increases for construction are not the current market norm.
Marine
Standard marine cargo cover is generally competitive. War-related marine, particularly on Red Sea and East African routes, has hardened materially. Marine war pricing has risen sharply, capacity has contracted, and route selection has become a working factor in placement.
Berkley Risk explores this in detail in our article on how the Red Sea crisis is reshaping SA marine insurance in 2026.
Political risk and political violence
This is the clearest hardening area in 2026, but the distinction between related but separate covers is important:
- Political risk: expropriation, nationalisation, breach of contract by government
- Political violence: riots, strikes, civil commotion, where capacity has contracted
- Terrorism: related but distinct market
- War on land: separate specialised cover
- Marine war: particularly hardened on Middle East and Red Sea routes
- Contract frustration: political-risk sub-cover, still available
- Currency inconvertibility: political-risk sub-cover, tightening for higher-risk sovereigns
- Sovereign non-payment: political-risk sub-cover, similar picture
Middle East instability has driven sharp increases in aviation, marine hull and cargo, and political-violence pricing for risks in or connected to the affected region. Our article on how Middle East instability is creating new political risk exposures looks at what this means for SA businesses.
Where the market is still hard in 2026
Not everything has softened. The pockets that remain challenging in the current market:
- Political violence and civil unrest exposure
- Marine war (particularly Red Sea, East African and Middle East routes)
- US-exposed casualty (any liability with US claimant potential)
- Distressed motor fleets
- Catastrophe-exposed assets (coastal flood, high-hail zones, wildfire zones)
- Complex construction and energy projects (large CAR/EAR, mining, tunnelling, prototypical technology)
- Poor-loss accounts (any line, any sector)
- Risks with material data or governance deficiencies
The defining feature of 2026 is sharp differentiation. A well-managed South African business with clean data is likely to see improved renewal terms. A business with the wrong risk profile or inadequate risk information may see the opposite.
How to make the soft market work for you
For most SA commercial buyers, 2026 is buyer-friendly. The strategies that unlock the value:
- Fresh, comprehensive submissions. Capacity flows to well-presented risks.
- Independent valuations. Current declared values eliminate under-insurance and reduce insurer scepticism.
- Multi-quote panel. Competitive tension is central to accessing soft-market pricing.
- Deductible optimisation. Higher self-insured retentions can reduce premiums where cash flow allows.
- Layered placement. For larger programmes, an insurance tower with a primary layer and specialist excess layers can access more competitive capacity than a single-carrier placement.
- Co-insurance structures. Sharing risk across multiple insurers can unlock capacity that single-insurer placement cannot.
- Broker specialisation. Brokers with access to appropriate South African and international markets, including Lloyd’s capacity where suitable and available, typically bring more options for specialty lines.
Managing hard pockets when they hit you
If your specific business falls into one of the remaining hard segments, the tactics differ:
- Engage the market earlier: 90 to 120 days before renewal, not 30
- Present risk-improvement documentation (fire protection upgrades, cyber security investments, claims-cause analyses)
- Consider parametric or catastrophe-response cover where relevant
- For political violence and war-related marine, work with brokers who have access to specialist markets
- Review whether Sasria or specialist political-violence cover better fits the exposure
- For US-exposed casualty, structure the programme with US-admitted and offshore layers appropriately
How Berkley Risk approaches 2026 renewals
Berkley Risk is an authorised financial services provider (FSP #54407) that arranges specialist commercial insurance for South African businesses. We arrange access to appropriate South African and international insurance markets, including Lloyd’s capacity where suitable and available.
That access matters most for risks that need capacity or expertise not readily available in the domestic market, such as political risk, complex marine, specialty engineering, high-limit professional indemnity and specialist cyber. For more standard risks, a well-presented submission to the right domestic insurers is often where the soft market delivers most value.
Outlook for 2026 and 2027
Based on current conditions:
- Competition is expected to continue in most lines through 2026, particularly in property, D&O and cyber
- US-exposed casualty remains the notable exception
- Any material catastrophe event, insurer capital contraction or ransomware severity spike could moderate the softening
- Political violence and marine war remain event-driven markets. Capacity availability can change quickly with new conflict escalation
The broad direction is favourable for SA commercial buyers, but the trajectory is not linear or uniform. Individual risks should be assessed on their own merits rather than on a general market narrative.
Frequently Asked Questions
Is the South African commercial insurance market hard in 2026?
No, not broadly. Most commercial lines are more competitive than in recent years, and Lloyd’s has flagged continuing property rate softening. Some specific segments (political violence, war-related marine, distressed motor, US-exposed casualty and poor-loss accounts) remain hard, but the overall market is buyer-friendly for most well-managed risks.
Why is my premium going up if the market is soft?
Premium and rate are different. Your total premium can rise because your revenue grew, your sums insured were adjusted for inflation, you added locations or activities, you had a recent claim, or your risk information at submission was incomplete. Ask your broker to break out the rate change from the exposure change.
Which lines are actually hardening in 2026?
Political violence, war-related marine (especially Red Sea and East African routes), US-exposed casualty, distressed motor fleets, and complex construction or energy projects. Everything else, including property, standard marine cargo, cyber, D&O and most PI, is generally competitive or softening.
How has the cyber market changed?
Cyber has moved from the sharp rate increases of 2022 and 2023 to a much more competitive market, with more capacity for buyers with strong controls. The soft cyber market may not last indefinitely, but it is the current position.
Does a softer market mean every renewal will be cheaper?
No. Well-managed risks with good data and clean claims records are the most likely to benefit. Businesses in hard segments, with poor claims experience or with incomplete risk information may see the opposite, and growth in exposures can still push total premiums up.
Should I move to a new broker or insurer to capture the softening market?
Not necessarily. A well-structured renewal with your current broker can capture the benefits of a soft market. If your broker cannot access competitive alternative quotes, or cannot explain rate versus premium movements, that is a signal worth considering. Panel-broking or multi-quote strategies can validate the market price on your risks.
Will the softening continue into 2027?
Nobody can say with certainty. Current conditions point to continued competition in most lines, with US-exposed casualty the notable exception, but a material catastrophe event, a large casualty loss trend or insurer capital contraction could change the picture quickly.
Review your 2026 renewal strategy
If your renewal is coming up in 2026, this is a market to test properly. Well-managed risks can secure better rates, broader cover or improved programme structures. Difficult risks require earlier engagement and better presentation.
Berkley Risk arranges specialist commercial insurance for South African businesses, with access to appropriate South African and international insurance markets, including Lloyd’s capacity where suitable and available. To discuss your 2026 renewal, contact Berkley Risk.
Berkley Risk is an FSCA-authorised financial services provider. FSP #54407.
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