Issuer Credit Rating (rating) downgrades on U.S. property/casualty (P/C) insurers in the first half of 2026 were nearly half the level reported in the same prior-year period, while the number of upgrades increased by a third, according to a new AM Best special report.

The Best’s Special Report, titled, “Substantially Fewer Downgrades for U.S. Property/Casualty Insurers in First Half 2026,” notes that rating affirmations were the most common action taken, comprising 81.5% of ratings actions taken on P/C insurers in the first half of 2026. The overall number of rating actions in this segment declined from 326 in the first half of 2025, to 292 in 2026.

According to the report, carriers across the industry continue to experience the impact of inflation and rising reinsurance costs. So far in 2026, P/C insurers have benefitted from relatively benign conditions in terms of the impact from major weather events. “Given the rate increases earning through in the overall P/C segment, personal lines writers are better positioned to navigate these conditions than they have been for the past few years,” said Helen Andersen, industry analyst, AM Best.

Commercial lines carriers have reported solid results despite having to contend with social inflation. Results were boosted by higher yields and overall investment performance. “Still, some lines—in particular, commercial auto and commercial casualty—face significant challenges,” Andersen said.

Among the report’s other highlights:

• The majority of 2026 downgrades occurred on commercial casualty and commercial auto carriers, reflecting the ongoing challenges in these lines.
• Over half of downgrades were driven by poor operating performance, as some insurers have struggled to keep losses under control. Deteriorated balance sheet metrics drove a further 27.3% of downgrades driven by adverse reserve development.
• The most common driver of P/C ratings upgrades was a change in operating performance. These changes drove about one-third of upgrades. The next most common drivers, which accounted for 20.8% of upgrades each, were improved balance sheet strength and a change in rating unit due to a structural change in an organization.

To access the full copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=369203.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2026 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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