pricing

With property catastrophe reinsurance rates significantly softening at the January 2026 renewals, rating agency Fitch forecasts that further softening will continue into the April, June, and July renewals later this year.

Despite a series of large catastrophe events within the past year, such as Hurricanes Helene and Milton, and the Los Angeles wildfires, capacity in the reinsurance sector continues to build and prices should begin to get progressively softer, according to J.P. Morgan.

Over the next year, a vast majority of reinsurance buyers expect attachment points for their excess of loss programs to remain stable. Many also indicated interest in purchasing more aggregate reinsurance in 2026 and additional tail-risk coverage during the year, the latest survey by Moody’s Ratings shows.

While reinsurance rates have been trending downward throughout 2025 as the market softens following a period of historic hardening conditions, pricing pressure is now expected to persist absent a severe hurricane season or other major loss, according to analysts at Morgan Stanley.

Abundant capacity and increasing competition among reinsurers are leading to softer pricing during the June and July renewals, which supports Fitch Ratings’ expectation that market pressures will persist in affecting prices even after the peak in 2024.

Fitch Ratings, a provider of credit ratings, research, and risk analysis, expects to see a further expansion of alternative reinsurance capacity in 2025, supported by cyber catastrophe bond issuances, which will add to the reinsurance sector’s capital base and help absorb earnings volatility.

In a new update on the Los Angeles and Southern California wildfires, Evercore ISI analysts have said they believe that losses from the event are unlikely to change the trajectory of reinsurance pricing, which the firm anticipates will still be down 10% to 20% at the mid-year renewals.

Signs that the catastrophe bond pricing environment has become more stable are becoming increasingly apparent as the end of 2014 approaches and the pace of price declines continues to slow, according to a report by ratings agency Moody’s.

The European Insurance and Occupational Pensions Authority (EIOPA) cites the increasing attraction that insurance-linked securities (ILS) have as a reinsurance and risk transfer tool for sponsors in its latest financial stability report, but warns again that discipline is required.

As expected, the increasing trend for property catastrophe reinsurance firms to loosen terms and conditions at renewals, as they seek to compete in a market of excess traditional and growing third-party reinsurance capital, is set to come under scrutiny.