Investment research firm Autonomous said the impact of the softening reinsurance market is becoming increasingly apparent, saying ongoing pricing declines are starting to impact revenue growth and it expects to put more pressure on underwriting performance over time.
The last major renewal season of 2026 is now over, with property catastrophe reinsurance pricing weakening at each successive renewal, Autonomous said in its latest report. The company said price drops widened from the mid-teens at renewal time in January to the mid-teens in April, then dropped by 20% or more during renewals in June and July.
Autonomous estimates that renewals in June and July accounted for about 15% to 20% of annual reinsurance volume under its coverage, while renewals on Jan. 1 were about 50% to 60%.
The company said recent broker commentary on mid-year renewals has been influenced by structural improvements in the Florida market, where reinsurers are seeing lower expected losses, adding further downward pressure on pricing.
The company noted that an analysis published by Marsh/Guy Carpenter compared insured losses from Hurricane Milton in 2024 to insured losses from Hurricane Irma in 2017, highlighting a 69% decrease in claim frequency and a 74% decrease in claim severity.
Autonomous said upcoming second-quarter results should provide a clearer picture of how individual reinsurers have been affected by the latest renewals, including the impact on pricing and premium volumes. However, it expects the trend during the early renewal period to continue into the mid-year season.
According to Autonomous, the cumulative effect of successive rounds of price cuts is now becoming more apparent as renewals are measured against an already weak market.
Property catastrophe reinsurance rates have broadly recovered to 2022 levels ahead of a market pricing reset in January 2023, the company said. It added that the Guy Carpenter Property Catastrophic Rate Index is currently just 1% above the average recorded between 2020 and 2026.
Autonomous also noted that the market fell faster than it and many investors expected. In its view, this partly reflects that the market is catching up after adopting more gradual easing policies in 2025. The report noted that a 16% interest rate cut in 2026 would be much larger than the reductions recorded in the second year of the previous four soft market cycles.
While Autonomous doesn’t expect the soft pricing to impact earnings immediately, it believes the impact is already starting to be felt. The company said revenue growth is facing increasing pressure and it expects these headwinds to persist. The company added that underwriting margins have remained strong to date, although good loss experience has helped mitigate the impact of lower pricing.
Autonomous highlighted SCOR’s comments earlier this year that renewals would create a two percentage point headwind to the combined ratio on a projected premium basis. It also noted that Munich Re’s guidance for a combined ratio of “approximately 80%” for full-year 2026 has actually shifted to expect results to now be more likely to be above 80% rather than below 80%.
Autonomous said continued healthy loss-making activity is helping to offset some of the immediate pressure from softer pricing, while company-specific measures, including cycle management and stronger release of reserves in the prior year, are likely to continue to provide support.
