According to Howden’s latest renewal report, when reinsurance is renewed on January 1, 2026, the decline in European property catastrophe rates varies by region, with declines of up to 20%, and the company expects this part of the market to decline further in 2026.
The global insurance and reinsurance brokerage group said these reductions in renewal rates were driven in part by historical loss experience – including hail in Bernd, Germany (2022) and Italy in 2023 – as well as strong advocacy by brokers on behalf of their clients.
France, Italy, Switzerland and the UK saw the largest rate cuts, ranging from 10% to 20%, while Germany, where direct placements were more common, experienced more modest cuts, ranging from 8% to 11%.
Howden noted that European real estate catastrophe renewals on January 1, 2026 are determined by low-loss activity, excess supply of capital and reinsurers’ desire to defend revenues. Capacity exceeded demand as existing reinsurers used retained earnings to compete for contract signings and maintain market share.
“The renewal process is later than in previous years, with many schemes issuing firm orders at the same time, making it more difficult for reinsurers to adjust their deployment strategies. Smaller, less diversified cedants purchased on a combined catastrophe and risk basis generally see smaller reductions (down 10% to 17.5%), while risk excess tiers are down 10% on average,” Howden said.
The report shows that reinsurer interest is more fragmented than in difficult times, leading to less consistency across projects and tiers. Some reinsurers maintain strict underwriting discipline, while others demonstrate greater flexibility, producing more granular renewal outcomes.
Despite the change in terms, retention rates have remained largely unchanged as most cedants have chosen to save money rather than pursue lower attachment points.
“As a result, cedants have begun exploring ways to redeploy budget savings in late 2025 and early 2026, targeting stand-alone sub-tiers, reinstatement of premium coverage, new program structures or other over-allocation strategies to better manage retention. Reinsurers will respond with additional capacity as they seek to enhance top-line revenue not captured during the January 1, 2026 primary signing process,” Howden explained.
Howden expects the market to remain soft for the remainder of 2026, although this could be tempered by increased scrutiny of profit sustainability or the occurrence of significant losses. Buyers are likely to continue to benefit as favorable market conditions spur further innovation and help close specific coverage gaps.
One area is parametric protection, which Howden says is attracting clients looking to supplement core plans or looking for solutions to risks not adequately covered by standard treaties.