Loss free Aus and NZ reinsurance renewals fall 10-15%, cyclone risk less material: Howden Re

At the July 1st 2026 reinsurance renewals loss free business in Australia and New Zealand saw rate reductions of between 10% and 15%, as sharpened reinsurer focus and more active overseas capacity softened the market, according to broker Howden Re.

The broker explained that the role of cyclone risk has become less material in reinsurance programmes in Australia and New Zealand, with the Australian government backed cyclone reinsurance pool an influencing factor at the renewals.

Howden Re said that the July 1st 2026 reinsurance renewals was completed for cedents in Australia and New Zealand against a backdrop of “sustained reinsurer profitability, abundant global capacity, and an increasingly assertive buyer community.”

Cedents have been buoyed by the reinsurance softening seen in other regions of the world this year and often increased their vertical limits purchased, which the broker says is a reliable signal of the market shifting in the favour of buyers.

While rate reductions of 10% to 15% were broadly achieved, Howden Re notes that some cedents secured larger reductions than that.

There has been sharpened reinsurer focus on business in Australia and New Zealand, as more active overseas capacity looks for portfolio diversification.

In addition, pricing while softened continues to attract reinsurance capital, as it is considered sufficient to generate adequate returns on capital still.

“That balance, diversification value alongside continued rate adequacy, underpins a reinsurer appetite that remains broad even as pricing falls,” Howden Re explained.

Earthquake risk continues to be the dominant driver of reinsurance limits in Australia and New Zealand, shaping how buyers structure their reinsurance programmes.

Flood and bushfire risks continue to influence the lower to mid layers of the reinsurance tower, while hail is still viewed as carrying material potential.

But cyclone risk has moved to be viewed as a peril that is “demonstrably less material” according to Howden Re, citing the Australian governments cyclone reinsurance pool as a key factor that has “meaningfully altered the peril hierarchy for a number of cedents.”

The broker stated, “For many, cyclone has moved from a primary peril of comparable weight to earthquake, to one that is now demonstrably less material. Reinsurers have fully incorporated this shift into their appetite and pricing, and it has contributed to the overall broadening of support for Australian programmes.”

Catastrophe loss experience has been relatively benign over the last twelve months in the region, which has helped to maintain a stable view of risk among the reinsurers.

On the property reinsurance side, Howden Re also noted that a number of programmes saw either increases in, or the complete removal of, event limits.

This is a “further structural reflection of the soft market environment” the reinsurance broker said.

Richard Pike, Head of Treaty, ANZ, Howden Re, said, “What this renewal demonstrates is that ANZ continues to occupy a distinctive position in the global reinsurance landscape. Capacity is broad, appetite is competitive, and cedents have the leverage to improve their programmes meaningfully. The task now is to use that window well, building structures that will be resilient not just in a soft market, but through whatever comes next.”

John Philipsz, Managing Director, Head of Howden Re Australia, commented, “This has been a renewal in which prepared buyers with well-constructed programmes have achieved strong outcomes, not just on price, but on structure and terms. The ANZ market continues to command genuine reinsurer attention, and the conversations we are having reflect that. Our focus remains on helping clients use current conditions purposefully, whether that means expanding limit, broadening coverage, or building more durable panel relationships.”

The outcome of the July 1st reinsurance renewals for Australian and New Zealand cedents puts the market in a position of relative strength, the broker said.

With broad reinsurer appetite, competetively priced capacity and cedents having the leverage to improve their reinsurance towers.

Howden Re explained that, “The global softening trend shows little sign of reversing in the near term, and the local conditions that make ANZ attractive in the form of rate adequacy, diversification value, and a well-regulated primary market, remain intact.”

The question now asked is whether the improvements made to reinsurance structures will prove sufficient as the global risk environment evolves, according to Howden Re.

Andy Souter, Head of APAC, Howden Re, added, “The conditions at 1 July reflect a market that has matured considerably in how it engages with the softening cycle. Buyers are more sophisticated, programmes are better constructed and the conversations we are having are more strategic. That is true across APAC, and ANZ is at the forefront of it. Our continued investment in the region, in people, in relationships and in analytical capability, is a deliberate expression of our conviction in its long-term value. We are building for the long term here, and this renewal is a reflection of that commitment.”

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