Property reinsurance softening accelerates at mid-year amid capital growth, ILS expansion: Guy Carpenter

Guy Carpenter, the global reinsurance broking firm, has reported that a combination of abundant capacity and a growing appetite from reinsurers has kept the competitive pricing environment intact at the mid-year renewals, while also highlighting that current market conditions are encouraging buyers to explore alternative options such as parametric solutions and sidecars to complement traditional catastrophe programmes.

In its July 2026 reinsurance renewals report, the broker states that within property lines, attractive terms and coverage options are spurring exploration of supplemental solutions to augment traditional catastrophe programs.

Dean Klisura, President & CEO, Guy Carpenter, commented: “In the current market conditions, cedents have secured competitive pricing and terms on their reinsurance programs, but many are also exploring alternative options, such as parametric solutions and sidecars, as ways to complement their traditional protection. We expect this trend to continue as we move through the remainder of the year.”

Notably, the broker’s report explained that following an exceptional 2025, the catastrophe bond market has continued to remain active so far in 2026, with 60 deals from 58 sponsors closing in the first half of 2026, totaling US$15.8 billion in limit.

The broker also said that attractive catastrophe bond rates drove record-level activity, reaching over $61 billion in total outstanding limit for the first half of 2026, which underscores continued sponsor demand and investor capacity.

At the same time, parametric solutions are expanding into secondary perils, including flood, wildfire and severe convective storm, where protection gaps remain significant and continue to grow.

“While aggregate insured catastrophe losses remain below average, the frequency of low severity events such as severe convective storms remains an ever-present risk where parametric solutions can address client needs,” the broker explained.

Guy Carpenter also emphasised that the abundance of capital is keeping the property reinsurance market soft, with risk-adjusted decreases further deepening from levels seen at the January 1st renewals.

The broker has also updated its global property catastrophe rate on line (ROLs) index, which has decreased from -12% at January to -16% at mid-year.

According to the firm’s report, market softening has also increased demand for property retrocession, driven by both a greater number of new buyers, and existing buyers expanding their placements.

“There has been particular demand for aggregate covers, which, in most cases, was met by existing markets together with some new entrants. Additional purchasing utilized most of the capacity available at the mid-year, from both traditional and ILS sellers,” Guy Carpenter said.

As well as this, Guy Carpenter observed that the mid-year casualty renewals continued to demonstrate nuanced outcomes, reflecting adequate capacity, differentiated pricing based on loss experience, and evolving market structures as clients increasingly sought to leverage structured risk solutions.

“Both legacy and sidecar markets demonstrate renewed momentum in the structured risk space for casualty lines. Legacy transactions benefiting from improved pricing clarity and sidecar vehicles are capitalizing on robust investor demand for P&C risk,” the broker noted.

According to the firm’s report, in the marine market, the total loss reserve for the 2024 Baltimore bridge collapse increased from US$1.5 billion to US$2.8 billion.

Guy Carpenter noted that this will largely be borne by the reinsurance and retrocession markets and also explained that as the latest reserve increase occurred after 90% of impacted programs were placed in 2026, pricing implications will not be seen until the 2027 renewal season.

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