A soft insurance market should create opportunity for insurance buyers.
When capacity increases, competition strengthens and insurer appetite improves, which means businesses are often better placed to test the market, challenge pricing and improve the overall value of their insurance program.
For many organisations, that may result in lower premiums. In some classes, it may also mean broader terms, more insurer options and a stronger negotiating position.
However, the benefit of a soft market is not always automatic.
Many businesses rely on their broker to identify and capture those opportunities on their behalf. However, in commission-based broking models, broker remuneration is often linked to premium size. When premiums rise, commission income may rise. When premiums fall, commission income may fall.
This creates an important alignment question for clients.
When the client benefits from a lower premium, a commission-based broker may earn less. That does not mean the advice is wrong, but it does mean the broker’s remuneration model should be understood and reviewed, particularly for businesses with significant insurance spend.
What the current market means for clients
The current market is not moving in one direction across all classes.
The 2026 INFORM Market Outlook Report from Insurance News and Finity describes softening conditions across several commercial lines, with premium rate reductions across financial lines, corporate property, liability and cyber. The report attributes this to strong competition, abundant capacity and favourable loss experience, following several years of profitable industry performance.
At the same time, the report makes clear that the market is not uniform. Some SME and personal lines classes continue to experience modest increases, largely due to claims inflation.
For clients, this creates a more complex renewal environment. A premium reduction may be available in one class, while another remains under pressure. In some areas, the opportunity may be lower pricing. In others, it may be improved terms, broader cover or a more suitable program structure.
This is why a soft market should be used to test the overall value of the insurance program, not simply the renewal price.
Where broker incentives can diverge
A commission-based remuneration model is not unusual in insurance broking. However, it can become more relevant during a soft market.
If a broker is paid a percentage of premium, a successful reduction in premium can reduce the broker’s income from that account. At the same time, achieving that reduction may require additional work. A broker may need to approach more insurers, negotiate more carefully, compare different options, review policy wording and explain the trade-offs between price, cover and insurer quality.
The issue is whether the client has visibility over how the broker is remunerated, whether that remuneration remains appropriate, and whether the broker’s service model supports the level of review the client requires.
This is particularly important for businesses with complex operations or significant insurance spend. A small percentage difference in premium can represent a substantial commercial outcome. Likewise, a poorly tested renewal can mean missed savings, inadequate cover or unnecessary expenditure.
For this reason, broker remuneration should not be treated as an administrative detail. It should form part of the overall governance of the insurance program.
How the issue can appear in practice
The signs of misalignment are not always obvious.
A renewal may still be completed on time. The premium may still reduce. The broker may still present the outcome as competitive. However, the client may not have enough information to know whether the full opportunity was tested.
The broker may approach only a limited number of insurers. The renewal may rely heavily on the incumbent insurer, rather than creating broader competition. A modest reduction may be presented as a strong result, even where market conditions suggest a more comprehensive review may have produced a better outcome.
There may also be limited discussion about alternative structures, including deductibles, limits, policy design or longer-term placement options. These should be assessed against the client’s risk profile and commercial objectives.
Service levels can also be affected.
If premium reductions reduce commission income, the broker may have less commercial incentive to spend additional time on the account. The business may receive less detailed review, fewer strategic conversations or less proactive advice. In some cases, brokers may need to manage more accounts to maintain revenue, which can further reduce the time available for each client.
Lower premium is not the only measure of value
While a soft market can create pricing opportunities, lower premium should not be the only measure of success.
A cheaper policy is not necessarily a better policy. A premium reduction may be accompanied by reduced limits, higher deductibles, narrower wording, additional exclusions or conditions the business may not be able to meet in practice.
A soft market should give businesses an opportunity to improve value, but value needs to be assessed carefully. It includes price, cover, insurer quality, claims responsiveness, deductibles, exclusions, policy conditions and alignment with the business’s current risk profile.
This is where risk advice becomes more important than placement alone.
What clients should ask before accepting a renewal
Clients do not need to become insurance experts to ask better questions.
They do, however, need enough information to understand whether their broker has properly tested the market and whether the recommendation is supported by clear reasoning.
Before accepting a renewal, clients should be able to answer four key questions:
- Has the market been properly tested, including insurer options, pricing and genuine competition?
- Has the structure of the program been reviewed, including limits, deductibles, sub-limits, exclusions, policy conditions and alternative placement options?
- Is the program still aligned to the business, including whether the organisation is over-insured, under-insured or carrying risks that should be managed differently?
- Is the broker’s remuneration and service model clear, including how the broker is paid, whether commission changes if premium falls and what service the broker is being paid to deliver?
The role of independent risk advisory
Long-term broker relationships can be valuable, particularly where the broker understands the business, its claims history and its risk appetite. But in a soft market, familiarity should not replace scrutiny. The current arrangement may still be the right one, but it should be supported by evidence of market testing, suitable remuneration, appropriate service and an insurance program that remains aligned to the business.
Independent review can help businesses separate price movement from genuine value. It provides an additional layer of scrutiny, assessing whether the insurance program remains fit for purpose, whether the broker’s service model reflects the organisation’s needs and whether current market conditions have been used effectively.
This type of review starts with the business, not the policy. It considers the organisation’s operations, risk profile, contractual exposures, claims history, insurance structure and commercial objectives before assessing whether the current program remains appropriate.
This is where Risk Advisory Services provides support.
Risk Advisory Services provides independent risk and insurance advice for organisations that want greater confidence in their insurance program, broker relationship and total cost of insurable risk. Unlike a broker, it does not sell insurance policies or receive commissions from insurers. Its role is to act for the client, bringing objective review to the way insurance and risk are structured, reviewed and managed.
Risk Advisory Services can also assist with broker reviews and tenders, helping clients assess broker performance, remuneration, capability and service structure. For businesses that are not ready to test brokers, an independent review can still provide valuable assurance. For those considering a tender, it can create a more disciplined and objective process.
The value is not just in reducing premium. It is in giving the client greater confidence that its insurance program, broker relationship and risk strategy are properly aligned, and that any opportunity created by the soft market has been properly reviewed.