Soft Market Likely to Continue into Early 2026 – What This Means for Our Clients
The Australian insurance market has been through a period of adjustment over the past few years, with rising premiums, tighter underwriting and reduced insurer appetite becoming familiar for many clients; However, current market indicators suggest a shift is underway, and importantly, that soft market conditions are likely to continue into early 2026.
So, what does this actually mean for you as a client?
What is a “soft” insurance market?
A soft market is characterised by increased competition between insurers, greater capacity and, in many cases, downward pressure on premiums or improved policy terms. Insurers are more willing to compete for quality risks, which often results in broader coverage, higher limits or more favourable pricing at renewal.
While not every class of insurance behaves the same way, the overall outlook for many commercial and personal lines in Australia remains buyer-friendly heading into 2026.
What clients can expect
For many policyholders, a soft market creates opportunities to:
- Review and improve coverage, not just focus on price
- Negotiate better terms, conditions or excess structures
- Review sums insured; it is critical that your sums insured are in line with replacement costs. A soft market is an ideal time to review these.
- Explore alternative insurers where competition is strong
This is an ideal time to ensure your insurance program is aligned with your actual risk profile — rather than simply renewing what you’ve always had.
A practical example
Consider a small manufacturing business that experienced premium increases over several years. In a softening market, insurers may now be more receptive to that same risk — particularly if the business has invested in safety improvements or claims management.
At renewal, this could translate to:
- A reduction in premium
- Broader policy wording
- Removal of previously imposed sub-limits
- Improved claims conditions
Without actively reviewing the market, these opportunities are often missed.
While the outlook is positive, not all risks or industries will experience the same level of softness. Claims-heavy sectors, catastrophe-exposed locations or specific lines such as motor may still see pressure. Market conditions can also change quickly following major weather events or shifts in reinsurance costs.
A soft market doesn’t mean “set and forget”. It means strategy matters more than ever. Our role is to help you take advantage of favourable conditions, ensure your cover keeps pace with your business or lifestyle, and protect you against future market changes.
If you’d like to understand what the soft market could mean for your insurance policy, we’re here to help, now is a very good time to have the conversation.