Property cat terms hold firm at 1/1 as RenRe preserves key structural gains: Execs

RenaissanceRe is pushing back against the idea that the January 1, 2026 renewals mark a return to pre‑hard‑market softness in property catastrophe. While prices fell at 1/1, executives from the firm stressed that the structural changes of the last two years, higher retentions and tighter terms & conditions, have been preserved, which ultimately supports risk adjusted returns.

Speaking during the reinsurer and third-party reinsurance capital manager’s Q4 2025 earnings call, CEO Kevin O’Donnell flagged that while property cat rates decreased at the January renewals, structures still held up.

It’s a positive signal for investors in the firm’s range of reinsurance joint-venture vehicles and insurance-linked securities funds, suggesting key renewal terms were relatively stable at 1/1.

“Property cat rates for us were down low teen percentages, we found some opportunities to grow which should keep top line premium and property cat down only mid-single digits, excluding the impact of reinstatement premiums. Terms and Conditions mostly held solid, including retentions,” the CEO said.

He continued: “As I previously mentioned, we are a larger and more diversified company. Two drivers of these changes occurred in 2023: the step change in property cat and our acquisition of Validus.”

Also during the call, Group CUO David Marra broke down the dynamics that were seen at 1/1, with the executive acknowledging that an influx of capacity put pressure on pricing.

“Our goal in property catastrophe was to maintain our existing portfolio and deploy additional capacity into attractive opportunities. Reinsurance supply was up following several years of strong results, this additional supply resulted in increased rate of pressure globally, with rates down on average in the low teens,” Marra said.

“For our portfolio, retentions and terms and conditions remain consistent with recent strong levels. We successfully renewed our existing lot and deployed new limits selectively across our own and managed balance sheets. Overall, we expect to see a reduction in gross premiums written in Q1 due to rate decreases, which will be partially offset by growth from new demand.

“Followed margin of the property catastrophe book remains well above the cost of capital, and as we described last quarter, there are several mitigates to the effect of rate decreases on our net retained business. First, we shape our portfolio with ceded reinsurance, which improves our net result. Ceded rates were down high teens across our portfolio.

“In addition, we renewed a series of our Mona Lisa cat bond at a larger size, with spread tightening by more than 50% on a risk adjusted basis.”

With this, Marra clearly highlights how RenRe’s retrocession and other ceded purchases came in with higher rate decreases than their inwards underwriting in property cat, which helps the firm manage the price declines better.

During the Q&A portion of the earnings call, when asked whether the outlook of mid‑single‑digit premium contraction in property catastrophe is likely to apply to the full year, O’Donnell explained how the dynamics seen at 1/1 would likely carry into the mid‑year renewals.

“That is our expectation for the year. If you look at the supply and demand dynamics at 1/1, we expect them to persist. So, we anticipate that there will be continued rate reductions going into the mid-year renewals,” O’Donnell said.

However, he drew a sharp distinction between headline rate movement and underlying risk adjusted returns, particularly for U.S. mid‑year business.

“That said, if we look at rate adequacy it’s a bit of a different story. There’s very strong rate adequacy in the mid-year renewals. A lot of those are U.S. focused, and many were affected by the wildfires. So, we go into that renewal at the same risk adjusted reduction. So, if top line reductions are a little less, I think the robustness of the rate adequacy should serve to produce results similar to what we got at 1/1.”

Also during the call, O’Donnell noted that none of the firm’s investor supported joint-ventures entered 2026 any smaller than they were last year, leading to an expectation of relatively stable fee income ahead.