Reinsurance supply and demand to favor buyers in 2026: Moody’s Ratings

Moody’s Ratings forecasts that property catastrophe reinsurance pricing will likely fall around 15% over the coming year, as elevated capital levels result in a supply-demand dynamic that favors buyers of protection.

Commenting on the state of the market after a relatively benign, in insured loss terms, Atlantic hurricane season, Moody’s Ratings notes that demand for reinsurance is expected to remain strong as it provided some commentary on expectations for the property catastrophe risk markets.

With 2025 set to be the sixth consecutive year where global insured catastrophe losses surpass the $100 billion mark, a data point Swiss Re confirmed earlier today, Moody’s Ratings expects buyers of reinsurance to remain focused on securing more protection.

The rating agency says that property catastrophe reinsurance pricing will continue its drift lower, but that despite this continued pull-back expected risk-adjusted returns still remain attractive for risk capital providers.

“Next year, demand for reinsurance is likely to remain strong as primary companies seek to reduce volatility and secure more limit to account for increased property replacement costs,” Moody’s Ratings explained.

Further noting that, “On the supply side, although catastrophe losses were high globally, we have not seen capital deterioration in the reinsurance sector and alternative capital flows into catastrophe bonds are at record levels.”

Because of these dynamics a buyers marketplace is expected to be a dominant feature of 2026, with projections already being made that rates will likely fall at the mid-year renewals if major loss activity isn’t seen.

Moody’s Ratings said that, “As a result, we expect reinsurance supply and demand to favor reinsurance buyers, with pricing for property catastrophe reinsurance likely down around 15%, though there will be variations by region and peril.”

But qualified this by highlighting that property catastrophe risks will remain an attractive place for reinsurers, which includes capital providers from the insurance-linked securities market.

Moody’s Ratings summed up that, “Despite the pullback in pricing, expected returns for property catastrophe reinsurance are still attractive,” also noting, “Terms and conditions are expected to be broadly stable, though we are beginning to see some signs of erosion.”