Howden’s January 1, 2026 reinsurance renewal report shows that risk-adjusted global property catastrophe reinsurance online rates fell by an average of 14.7%, accelerating from the 8% decline in 2025, marking the largest year-on-year decline since 2014.
Prices fell across most market sectors when reinsurance came up for renewal on January 1, 2026, bringing pricing back to levels last seen around four years ago, albeit with relatively higher riders and tighter terms, the report said.
David Flandro, head of industry analysis and strategic consulting at Howden Re, commented: “The renewals on 1 January 2026 confirm a decisive shift in pricing momentum, with risk-adjusted price cuts across most major lines bringing rates back to levels last seen around four years ago.
“This shift was driven by strong retained earnings and record ILS issuance, increased capacity and tight competition. This is not a return to underwriting practices from the last weak market.
“Additional strings remain high by historical standards and terms and conditions are more stringent; capital is being deployed selectively. The result is a market that is softening but remains rational – a market that continues to price volatility appropriately and create economic value for investors.”
Howden, who focuses on the global property catastrophe sector, observed that despite another year of increased catastrophe activity (led by the largest wildfire insured loss ever in Los Angeles), placements continued to be completed, rates fell significantly and terms improved.
As mentioned earlier, risk-adjusted global property catastrophe reinsurance rates fell by an average of 14.7%, faster than the 8% decline in 2025.
In the U.S., cedants have benefited from strong supply, with reinsurers willing to deploy capital at margins that remain attractive despite lower interest rates, Howden noted. Therefore, on a risk-adjusted basis, the overall program decline is generally between 10% and 20%.
Meanwhile, in Europe, the report found that low-loss activity, oversupply of capital and reinsurers’ desire to defend revenue impacted renewals, with average plan rates falling by 10% to 20%.
“The degree of softening varies across markets, with results influenced by historical loss experience. France, Italy, Switzerland and the UK have seen the largest rate declines (down 15% to 20%), while Germany, where direct placements are prevalent, has experienced a more modest softening (down 8% to 11%),” Howden said.
Meanwhile, renewals in Asia Pacific are said to be competitive on January 1, 2026, as cedants will make mid-single-digit reductions in 2025 to make full use of ample capacity. Risk-adjusted pricing for no-loss non-proportional projects typically falls by 10% to 20%.
Tim Ronda, chief executive of Howden Re, said: “Healthy supply dynamics and increasing competition, especially amid the housing disaster, have created a real market rebalancing in this update.
“This in turn creates meaningful opportunities for Howden Re’s clients to secure broader coverage, improved structures and attractive pricing, even as risks remain structurally higher. Howden Re’s role in this refresh is to help clients navigate a more competitive but still disciplined environment.
“The best results are achieved by working with markets and capital providers to execute comprehensive, data-led project solutions that balance pricing, structure and risk transfer across portfolios.”
Turning to casualty headroom at reinsurance renewals on January 1, 2026, Howden pointed to improved market conditions, reflecting stronger supply dynamics.
Particularly in the U.S., the results are described as performance-driven against a backdrop of ongoing long-tail losses, ongoing reserve concerns and ongoing conservation needs.
“Overall, capacity remains stable, meaning most treaties are up for renewal when they expire on January 1, 2026. The trend toward greater syndication continues, reflecting typical line size constraints and a large market vying for project share. The expanding role of casualty ILS and sidecars is another important factor in the U.S. renewal process,” the company’s report added.
Meanwhile, the international casualty market has experienced modest softening at renewal, with increased capacity and a generally stable loss environment driving prices generally lower.
As expected, Howden said U.S.-related projects faced a more challenging update, with results sensitive to fluctuations in losses related to the nuclear verdict.
“Casualty insurance buyers in the London market benefited from strong supply, resulting in risk-adjusted rate reductions of 5-10% for excess loss plans from January 1, 2026. Underwriting capacity also increased in continental Europe, with excess loss plans performing strongly, achieving similar risk-adjusted rate reductions of 5% to 10% from January 1, 2026,” Howden’s report explains.
Elsewhere, performance across most specialty reinsurance businesses remained strong despite elevated geopolitical risks, which typically translates into improved performance for cedants at renewal on January 1, 2026.
Howden continued: “The increased clarity on the toll from ongoing conflict and other recent events, while painful for exposed carriers, removes lingering uncertainty and allows buyers to take advantage of broadly favorable market conditions.
“This cross-specialty dynamic is evident in credit and political risk, construction, cyber, marine and energy, and political violence and terrorism, with buyers benefiting from strong underlying portfolios and ample capacity. The airline industry bucked the trend of weakness, strengthening slightly after a series of losses in 2025.”
On the real estate retrocession front, despite market dynamics becoming more balanced, capacity at renewal on January 1, 2026 easily exceeded demand, with buyers considering additional limits of up to $800 million.
Favorable supply dynamics are supported by retained earnings from several years of strong performance, as well as inflows from new entrants and ILS.
Meanwhile, the loss environment remains manageable, with the Los Angeles wildfires impacting only a handful of projects and expected subrogation recoveries mitigating the impact.
“The combined effect of these dynamics has resulted in weaker prices on January 1, 2026, with risk-adjusted pricing falling by 12.5% to 21%, although results vary widely depending on coverage, attachment point and underwriting profitability. Changes in terms have been more limited, with retrocession companies generally reluctant to expand coverage to include non-natural catastrophes such as SRCC and terrorism,” Howden said.
Overall, Howden said, the broader market conditions outlined earlier in this article are expected to persist into 2026, supported by strong capital and reinsurers’ continued focus on defending market share, barring any major macroeconomic or industry-specific events.
The company’s report added, “Nevertheless, markets remain sensitive to losses, financial volatility and rising costs of capital, highlighting vulnerability to any serious adverse developments.
“This backdrop presents opportunities across the value chain. With supply exceeding demand in most regions, buyers benefit from lower interest rates and improving terms, while underwriting performance remains strong, delivering strong profits and capital returns.
“During times of elevated risk, increased likelihood of shocks and favorable market conditions, buyers are well-positioned to gain additional protection.
“For carriers, this shift rewards underwriting excellence while incentivizing innovation to unlock new risk pools and generate incremental premiums.”
Howden founder and CEO David Howden concluded: “The message from our analysis of the re/insurance market is clear: this is a rare moment in which everyone can benefit. We are in the midst of market weakness, with prices falling despite heightened political and economic volatility.
“By doing more to leverage data, predict future risks and innovate to respond to customer needs, reinsurers can stay ahead and remain profitable.
“This will mean customers will have more options to better protect themselves against unexpected shocks, whether political, cyber, litigation-driven or property. As a result, 2026 will be a year of endless possibilities. Corporates and re/insurers alike should take full advantage of this opportunity.”