Conning research finds profitable growth will depend on segment precision, agent experience, and disciplined technology use
HARTFORD, Conn., Sept. 29, 2026 /PRNewswire/ — Small commercial insurance has become an increasingly important growth market for property-casualty insurers, but the opportunity is far from uniform. As insurers extend their reach, differences in account economics, underwriting complexity and distribution needs are creating new strategic and competitive challenges, according to Conning’s study, Small Commercial Insurance Market: Insurers Extend Their Reach.
Conning estimates that the U.S. small commercial insurance market reached approximately $158 billion in direct premium at year-end 2025. The market includes businesses with sharply different risk profiles and economics, from sole proprietors and micro firms to larger, more complex accounts approaching the middle market. As insurers extend their appetite, profitable growth will require a more precise alignment of underwriting, distribution, product, service, and technology to each segment.
“The scale of the small commercial market is compelling, but the defining challenge is not simply reaching more businesses,” said Jay Sarzen, a Director in Conning Insurance Research and author of the study. “Insurers need to determine which segments align with their capabilities, make it easier for agents to place the right risks, and use technology in ways that improve speed and consistency while preserving necessary judgment.”
Key Findings
- The addressable opportunity is significant but more nuanced than the headline business count suggests. Conning estimates approximately 29 million small businesses may represent a more actively addressable market for insurers and distribution partners.
- Micro is emerging as an important growth segment. Executive interviews indicate that Micro businesses can offer current premium opportunity while also creating a pipeline to larger future accounts.
- Technology is changing the economics, not eliminating the need for expertise. Data, automation and AI can improve efficiency and expand reach, while agents, underwriting judgment and human expertise remain important to serving more complex risks.
The study also examines the health of the U.S. small business economy, industry-class growth, market leadership, commercial auto volatility, underwriting models, agency consolidation, alternative distribution, core system modernization, and the competitive balance between national and regional insurers.
Conning’s research suggests there is no single operating model for small commercial growth. Different segments require different combinations of scale, automation, underwriting expertise, distribution and service. For insurers, the strategic question is increasingly not simply how to expand in small commercial, but where their capabilities are best aligned with the opportunity.
For more information on the Small Commercial Insurance Market: Insurers Extend Their Reach, or to request a copy of the full report, please click here or call (888) 707-1177.
Small Commercial Insurance Market: Insurers Extend Their Reach is available for purchase through Conning Insurance Research at www.conning.com/insurance-research and through the Conning Library at https://library.conning.com/.
About Conning
Conning (www.conning.com) is a leading investment management firm with a long history of serving the insurance industry. Conning supports institutional investors, including insurers and pension plans, with investment solutions, risk modeling software, and industry research. Founded in 1912, Conning has investment centers in Asia, Europe, and North America. Conning is part of Generali Investments.
Media Contacts
Conning Insurance Research
888-707-1177
insuranceresearch@conning.com
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