Some sections also include ‘other signals on our radar.’ Write back and let us know if you’d like to see more details on any of those.

In Force is a weekly intelligence brief for P&C Insurance executives, delivering high-impact developments shaping the P&C space: what happened, why it matters, and what to do about it. It is designed for carrier and insurtech strategy, product management, marketing, sales, broker/agent relations, and innovation teams. Each issue distills complex shifts into decision-grade insight.

In Force is weekly, other Paid subscriber benefits include monthly deep-dives, quarterly trackers, and Premier Plan subscribers have Analyst Access.

On May 5, 2026, the Capgemini Research Institute released its 19th annual World Property & Casualty Insurance Report, framed explicitly as “The Intelligence Era in P&C.” The headline finding is that only 10% of P&C insurers have successfully scaled AI, and this minority, which Capgemini labels “intelligence trailblazers,” is generating measurably better business outcomes than the rest of the industry.

The performance gap is stark. AI trailblazers achieved up to 21% higher revenue growth and approximately 51% greater increase in share price over three years compared to peers. The report identifies a structural reason for the divide: 42% of insurers track no AI metrics at all, making it impossible to validate what works. Additionally, insurers are allocating 72% of AI investment to infrastructure while dedicating just 28% to change management and workforce capability, a ratio Capgemini argues is almost exactly backwards. Over half (55%) of P&C insurers report no clear ROI on AI initiatives, and the same proportion say it is unclear who owns AI inside their firm. Two thirds cite an internal AI skills shortage, and nearly half of employees with AI tool access say their workday is unchanged.

The report draws on 344 senior executive interviews, 809 employee surveys, and 1,113 policyholder responses across the Americas, Europe, and Asia Pacific.

The Capgemini report draws a direct causal line between AI maturity and financial performance at a moment when premium growth is decelerating and competitive pressure is intensifying. For strategy and product executives, the finding is unambiguous: AI is no longer a cost efficiency tool, it is a top line driver. The 60% of carriers still in exploration or proof of concept stage are not just behind on technology, they are falling behind on revenue.

This advances the AI execution accountability thread TIC has been tracking. Our April 29 deep dive on the silent AI carve out mapped the $4.7 billion specialty premium opportunity emerging from AI liability. Our April 27 coverage documented Berkshire, Chubb, and Travelers winning state approvals to exclude AI liability from standard commercial policies, with more than 80% of filings approved. The Capgemini data sits cleanly inside that arc: the carriers who treat AI as a core operating capability are the same ones positioned to build standalone AI underwriting franchises in front of slower peers.

The 72/28 infrastructure to change management ratio is the most operationally actionable finding. Capital is not the binding constraint on AI ROI. Workforce integration is.

Two convergent legal developments on May 4, 2026 reshape the regulatory and antitrust posture toward California homeowners market conduct.

California Department of Insurance vs. State Farm. Insurance Commissioner Ricardo Lara filed a formal Accusation and Order to Show Cause against State Farm General Insurance Company after an expedited Market Conduct Examination found a pattern of unlawful behavior in 2025 LA wildfire claims handling. State Farm policyholders submitted approximately 11,300 residential claims from the fires, nearly one third of all 38,835 claims filed across all insurers. CDI examiners reviewed a sample of 220 claims and found 398 violations in 114 of those claims, meaning over half of reviewed claims contained at least one legal violation. An additional 34 violations were identified based on consumer complaints, bringing total alleged violations to 432.

Documented violations included failure to begin investigating claims within the statutory 15 day window, failure to accept or deny claims within 40 days, unreasonably low settlement offers and underpayment, repeated adjuster reassignments creating “adjuster roulette,” improper denial of smoke damage testing, and failure to send required status communications.

The CDI is seeking penalties under California Insurance Code Section 790.035, which provides for $5,000 per violation or $10,000 for willful violations, putting the total in the $2 million to $4.3 million range. The CDI described it as the largest penalty pursuit this century following a wildfire disaster, and Commissioner Lara confirmed that suspension of State Farm’s California certificate of authority for up to one year is among the remedies the administrative law judge could impose. The CDI has recovered more than $280 million from all insurers for LA wildfire survivors since January 2026, with total insurer payouts exceeding $23.7 billion as of March 3, 2026.

State Farm publicly rejected the allegations, calling the action “reckless” and “politically motivated” and characterizing California’s insurance market as “dysfunctional.” The company stated that additional payments tied to identified issues were approximately $40,000 in the context of more than $5.7 billion paid across 13,700 auto and home claims, and emphasized the issues were “primarily administrative or process related.”

DOJ Statement of Interest. The same day, the U.S. Department of Justice Antitrust Division filed a Statement of Interest in Ferrier v. State Farm Fire and Casualty Company, pending in Los Angeles County Superior Court. The lawsuit, brought by 60 homeowners who lost their homes in the 2025 wildfires, alleges that 16 named homeowners insurance companies coordinated to cancel or non renew fire insurance policies in the years leading up to the fires, forcing policyholders onto the California FAIR Plan. The DOJ’s filing argues that the alleged group boycott is not shielded by the Noerr Pennington doctrine and that the McCarran Ferguson Act does not necessarily bar such claims. Deputy Assistant Attorney General Charlie Beller of the Antitrust Division stated the Division “is monitoring insurer conduct across the country to ensure that an improper understanding of federal law does not preclude state or federal antitrust claims.”

For personal lines executives across the industry, these two developments represent the leading edge of a new regulatory and legal posture toward insurer conduct during catastrophe events, and they have national implications, not just California implications.

This sits inside the long California arc TIC has been tracking. Our April 30 weekly moves coverage flagged State Farm General continuing to restrict capacity on commercial and habitation property with January 2025 LA wildfire reserves at $5.7 billion and a 17% homeowners hike approved in March. Our May 4 issue covered Travelers formally joining the Sustainable Insurance Strategy and committing to statewide homeowners expansion under Commissioner Lara’s reform framework. The same regulator who is welcoming Travelers in is now pursuing the largest post wildfire enforcement action in a century against the state’s largest homeowners writer. Carriers re entering California under SIS are now doing so inside a regulatory regime that has demonstrated willingness to pursue suspension of a top three carrier’s certificate of authority on claims handling grounds.

The CDI enforcement action establishes a new precedent: state regulators will conduct rapid market conduct exams immediately following major catastrophe events and will pursue penalty actions, not just remediation orders, at scale. The 398 violation finding across 220 reviewed claims implies systemic process failures, not isolated adjuster errors. Any carrier operating in wildfire exposed or hurricane exposed markets needs to audit its catastrophe claims handling workflows now, before the next event.

The DOJ’s entry into the antitrust case is equally significant. The federal government is now signaling that coordinated market withdrawal from high risk geographies may constitute anticompetitive conduct, with the Antitrust Division explicitly stating it is monitoring insurer conduct nationally. The named defendants include the same set of carriers whose California exits TIC documented through 2022 to 2024. If the case advances past dismissal, it could reframe the legal parameters under which carriers make underwriting appetite decisions in distressed markets, with implications for every state where carriers have exited en masse.

Marsh released its Q1 2026 Global Insurance Market Index in late April, with the full carrier earnings confirmation arriving through the first two weeks of May. Global commercial insurance rates fell 5% in Q1 2026, accelerating from a 4% decline in Q4 2025 and marking the seventh consecutive quarter of rate decreases. All global regions posted year over year composite rate decreases, a first in recent memory.

The line level picture is starkly bifurcated. Global property rates fell 9%, with US property down 10% and catastrophe exposed programs down 16%. Cyber rates fell 5% globally. Financial and professional lines including D&O and EPLI fell 5%. Casualty rates were the outlier: up 3% globally, up 9% in the US for the second consecutive quarter, and most importantly, US excess casualty rates jumped 18% in the quarter, a figure Marsh McLennan President and CEO John Doyle disclosed on the April 16, 2026 Q1 earnings call. The headline composite obscures that excess casualty layer dynamic almost entirely.

The casualty picture is now confirmed across multiple broker and carrier earnings calls. Chubb reported North America casualty pricing up 9.6% in Q1. Brown & Brown’s CEO confirmed carriers are “decreasing the limits they’ll offer” on casualty. Markel disclosed claim severity running “in the low double digits” in US casualty. Marsh’s own commentary noted that while capacity remains, many insurers have reduced available limits, and that US casualty rate increases are driven by persistent claims severity, particularly in excess layers.

The overall property softening is driven by abundant capacity and post hard market profitability. Gallagher Re has estimated a single catastrophe loss would need to exceed $110 to $125 billion to shift property pricing trajectory, against Q1 2026 insured natural catastrophe losses of roughly $18 billion. Casualty is increasingly a market within a market.

The casualty divergence is the single most consequential underwriting dynamic of 2026 for commercial lines executives. Social inflation, nuclear jury verdicts, aggressive plaintiff bar tactics, and expanded theories of liability are not abating despite the broader soft market. The 18% excess casualty rate increase is not a pricing anomaly. Multiple independent broker and carrier channels now confirm it as structural.

This is the casualty side of a bifurcation thread TIC has been tracking. Our May 6 deep dive on Chubb walking away from a quarter of its property book documented the property side: Evan Greenberg called the pace of property declines “dumb” and the carrier non renewed shared and layered property accounts where pricing fell 30 to 40%, while still growing North America Commercial 7.3% on the disciplined remainder. Property competition in 2026 is now being expressed through line size, attachment points, and ceded reinsurance cost rather than through filed rates. Casualty is moving in the opposite direction along the same dimensions: carriers are tightening limits, raising attachments, and pricing excess layers aggressively because the severity environment requires it.

For carriers with significant excess casualty exposure, the primary risk is reserve adequacy, not premium growth. The convergence of higher severity (Markel’s “low double digits”), limit contraction (Brown & Brown’s confirmation), and continued frequency in mass tort and commercial auto creates a compounding reserve deterioration risk that could surface in 2026 and 2027 results, particularly for carriers that have relied on favorable prior year development to maintain calendar year combined ratios.

For commercial buyers and brokers, the message is equally important. The soft market narrative being told in boardrooms and treasury departments does not apply to excess casualty. Program restructuring and limit adequacy reviews need to happen now, while primary casualty is still accessible, before excess layers harden further.

On May 6, 2026, Allianz Commercial and Coalition announced a transformative, long term strategic agreement under which Allianz will transition its entire standalone commercial cyber insurance business to Coalition, making Coalition Allianz’s exclusive global partner for cyber insurance across all commercial segments.

Under the structure, Coalition takes primary responsibility for pricing, product development, risk mitigation, and claims management for Allianz’s standalone commercial cyber portfolio. Allianz retains responsibility for multinational and large corporate underwriting, claims support, and service delivery, where its global infrastructure and regulatory licenses are necessary, and Allianz continues to provide long term insurance capacity to the partnership along with access to its global distribution network. The arrangement is structured around a minimum 10 year financial alignment with both upfront equity consideration and performance based components. Allianz is increasing its equity investment in Coalition and gains the right to nominate a director to the Coalition Board, with Allianz CEO Oliver Bäte expected to assume the seat at closing.

The rollout will proceed in phases, beginning in key collaborative markets: the US, UK, Australia, Germany, Denmark, and Sweden, with expansion to additional regions thereafter. Allianz Global Corporate and Specialty cyber specialists focused on larger corporate risks are expected to transition to Coalition over time, subject to local laws.

Coalition describes itself as the world’s first “Active Insurance” provider, a model that combines cyber insurance with continuous security monitoring, threat intelligence, and proactive risk mitigation delivered to policyholders before a claim occurs. Industry coverage following the announcement noted that the combined book makes Coalition the largest writer of cyber insurance globally.

This is the most consequential structural move in the cyber insurance market in years. For Allianz, a top five global P&C insurer, to hand operational responsibility for its entire standalone commercial cyber portfolio to a specialist platform is an explicit signal that Active Insurance models, technology integrated, real time risk monitoring, are outcompeting traditional carrier approaches in the cyber segment. Allianz is not exiting cyber as a balance sheet, it is exiting cyber as an operating model.

Coalition’s value proposition centers on reducing loss frequency through technology. Policyholders receive security scanning, vulnerability alerts, and incident response as part of their policy. The bet Allianz is making, in front of every other large traditional cyber carrier, is that this model will be a superior underwriting and distribution platform compared to building those capabilities internally.

For the broader cyber market, this deal accelerates the carrier as capacity versus carrier as risk manager bifurcation. This sits directly on top of the cyber market dynamics TIC has been tracking. Our April 27 coverage documented Chubb CEO Evan Greenberg invoking the “arms race” framing in response to Anthropic’s Claude Mythos, and Coalition CEO Joshua Motta publishing his own analysis on how Mythos should change cyber risk pricing frameworks the same week. Our April 13 coverage documented carrier targeting ransomware attacks against Beacon Mutual, Farmers, Erie, and Philadelphia Insurance, with the May 4 At Bay InsurSec data showing Akira ransomware driving more than 40% of 2025 claims and SonicWall VPN appliances present in 86% of those attacks. The bet on technology integration to reduce loss frequency at the underwriting stage is the only response to that environment that scales.

The timing is also notable against rate dynamics. The Marsh Q1 GIMI showed cyber rates down 5% globally. DUAL CEO Richard Clapham warned in late April that the global cyber market is approaching a “significant inflection point” with international rates down materially since Q4 2023 and combined ratios deteriorating. Allianz’s move suggests at least some major carriers believe the solution to the rate and loss sustainability problem is not repricing, but fundamentally redesigning the product through active risk management. Following Zurich’s April 22 closing of its $10.9 billion Beazley acquisition that TIC covered on April 27, this is the second major specialty cyber structural move in two weeks.

About The Intelligence CouncilThe Intelligence Council publishes sharp, judgment-forward intelligence for decision-makers in complex industries. We serve founders, operators, strategists, and investors who need clarity. Our weekly briefs, deep dives, and sentiment indexes are built to help you make money, manage risk, and outthink competitors. No puff pieces. No b.s. Just the clearest signal in a noisy, complex world.

Our content for P&C Insurance spans the overall space, personal lines, commercial, and cyber. From market sensing to go-to-market clarity, we deliver the strategic signals leaders need to move first and act confidently.

Discover partnership options here.