A recent report from Guy Carpenter, a reinsurance brokerage owned by Marsh McLennan, shows that the expansion of reinsurance capacity and reinsurance renewals at the critical time of January 1, 2026 have accelerated pricing softening in many business areas.
There is ample discussion around interest rate changes ahead of the crucial 1.1 renewal season. For real estate disaster settlements, buyers can realize double-digit risk-adjusted rate reductions on non-loss plans, Guy Carpenter said.
At the same time, protection buyers seek better risk sharing, including both gross and catastrophe quota shares.
Investor interest in insurance-linked securities (ILS) also contributed to softer real estate market conditions at 1.1, the reinsurance broker said, noting that 2025 catastrophe bond issuance broke records with 15 new originators entering the market.
Meanwhile, casualty reinsurance renewal results were driven by region, structure, historical results and outbound portfolio size, the report said. Overall, project renewals were stable, improving for clients with proportional structures, demonstrating portfolio discipline and strong overall performance.
Additionally, Guy Carpenter reports that the cyber market continues to evolve from quota shares and overarching protections to treaties with specific events, risks and hybrid designs at renewal time.
Guy Carpenter President and CEO Dean Klisura commented: “Despite global trade tensions and increasing regulatory scrutiny, the reinsurer achieved capital growth due to strong retained earnings. This allowed customers to benefit from lower prices and a wider range of innovative solutions to meet their rapidly changing needs.”
Reinsurer return on equity is expected to be 17%, with dedicated reinsurance capital growing a further 9% by 2025, the report said.
Guy Carpenter pointed out that by 2025, reinsurers will account for a lower proportion of global catastrophe insured losses, only 11%, compared with 20% in 2023.
This comes despite projected catastrophe insured losses of $121 billion in 2025, 18% below the five-year inflation-adjusted average.
Overall, excess capital positions, profitable underwriting results and property reinsurance rates are driving reinsurers’ appetite for growth, the broker said.