KBW analysts expect risk-adjusted property catastrophe reinsurance rates to fall by 15-20% during the January 2026 reinsurance renewal period, with overall declines expected to be closer to 20% in the relatively “late” season.
KBW said the unchanged attachment points in each occurrence reflected the reinsurers’ generally sustained discipline. Reinsurers generally expect at least adequate performance from catastrophe reinsurance in 2026.
Analysts also observed that the devastating California wildfires in January 2025 had little impact on property catastrophe reinsurance pricing during the subsequent June and July renewal periods, except for California accounts affected by losses. During these renewal periods, risk-adjusted pricing declined approximately 10% year-over-year, reflecting a broad view that rates are super-adequate following significant rate and attachment point increases in 2023, which exacerbated the more modest growth seen in previous years.
Apart from catastrophe reinsurance pricing (where non-risk, European catastrophe and retrocession reinsurance is reported to be down slightly more than the 15-20% range), KBW expects little change in the dominant casualty reinsurance market, particularly in the US, across most other lines. Therefore, for these lines, reinsurers should see broadly the same pricing and loss trends as primary insurers.
KBW recommends that reinsurers should generate acceptable returns in 2026, assuming catastrophe losses are reasonable and normal. However, the broader trend of falling property catastrophe reinsurance rates means expected returns are declining year over year, which may go a long way in limiting share price gains.
