As we approach the new year, we would like to thank you for everything you did during 2025. This past year has been one of transition.
This was especially true in Personal Lines. The year began with carriers continuing their rate increase, tightening underwriting guidelines, and limiting capacity.
But late 2025 brought relief. Loss trends stabilized, and carriers gradually reopened capacity, and the Personal Lines market entered a softening phase that is expected to continue throughout 2026. This soft market will create high consumer shopping activity, which is both a threat and an opportunity:
- Customers will look to switch for better pricing and coverage that aligns with their risk tolerance.
- Competitors will aggressively go after new business.
- Retention will require proactive outreach and value communication.
Agencies that plan strategically by balancing new business growth with strong retention processes will benefit most from the increased movement in the market.
Commercial Lines also showed improvement in 2025. Many carriers have increased their competitiveness for risks within their target appetite. However, this appetite often overlaps with other carriers in the market. This requires agents to rely on strong carrier relationships and the nuanced understanding of guidelines to place business effectively.
Some of the key challenges and opportunities for Commercial Lines in 2026 include:
- Older property remains difficult: Aging structures, deferred maintenance, and reinsurance pressures continue to make these risks challenging to place.
- E&S market growth: The Excess & Surplus market expanded rapidly in 2025 and will continue growing in 2026. It is no longer a last-resort solution—E&S is becoming a core part of supporting clients, especially in specialized or distressed segments.
- Saying no to the right risks: Knowing when you are wasting your time trying to write business that carriers don’t want to write is crucial. Successful agents will spend their time chasing business that fits a carrier’s appetite while unsuccessful agents waste time trying to fit a square peg into a round hole. Technology in 2025 matured from experimentation to practical adoption.
Data analytics and AI were two of the most discussed topics in the industry in 2025. Using data as a decision engine will be key to an agent’s success moving forward. Better data processes allow agencies to:
- Spot remarketing and retention risks.
- Identify cross-sell and rounding opportunities.
- Forecast revenue and carrier mix.
- Make faster, more informed decisions.
While AI is still early in the agency channel, its impact is accelerating. In 2026, agencies will see AI contribute to underwriting support, communication automation, predictive analytics, and customer service enhancements. Agencies that lean into AI will operate more efficiently and profitably, while those that ignore it risk falling behind competitors who adopt it early.
The coming year offers significant opportunity. A softening Personal Lines market, gradually expanding Commercial capacity, and rapid technology advancements all favor agencies that take initiative. Those prepared to invest in data, adopt emerging technologies, and capitalize on increased market activity will be well-positioned to thrive in 2026.