The property catastrophe reinsurance market in Australia and New Zealand continues to soften with “relatively late” renewals on July 1, according to data from Gallagher Re. First POV, Creative Moment – ​​July 2026 Updated Report.
Gallagher Re, the reinsurance brokerage and advisory firm owned by Arthur J. Gallagher, said ample capacity, weak demand and increased competition among reinsurers have led to further reductions in rates, with renewal rates at best remaining the same or reduced by up to 5% on a risk-adjusted basis, even for loss-affected catastrophe business.
Reinsurance brokers reported that rates in the region’s no-loss risk tier fell by 5% to 15%, while rates in the no-loss catastrophe tier fell more sharply, between 12.5% ​​and 17.5%.
Gallagher Re noted that the renewal season is running later than usual, with many cedants only releasing key information to reinsurers in June. This facilitates a more segmented approach to placement, particularly where the wear-affected lower floors are negotiated separately from the cleaner mid- and upper floors. Gallagher Re said cedants adopted this strategy to maximize cost savings on most projects while solving more challenging problems independently.
The report highlights that reinsurers generally recognized the impact of higher retention rates established during the hard market, which largely limited October and November storm losses in south-east Queensland to Tier 1, although the November event developed beyond early estimates.
Renewal discussions have focused primarily on pricing, with the cedent seeking only limited structural or wording improvements, according to the broker. The report adds that most remaining differences from the terms of the previous contract renewal have now been largely eliminated.
Gallagher Re also noted that a number of Asian and London reinsurers that had previously reduced or withdrawn capacity in Australia and New Zealand were returning to the market with flexible issuances to secure new shares. This added to already ample capacity, while consolidation of insurance companies and the introduction of cyclone pools reduced demand.
The report notes that existing reinsurers typically seek to retain or increase their existing shares, leading to competitive negotiations around capacity allocations. Additional capacity trickles down to aggregated and structured solutions as well, although adoption remains selective due to cost considerations.
Across each risk program, Gallagher Re said supply and demand imbalances continue to put downward pressure on pricing as reinsurers look beyond the real estate catastrophe business to deploy excess capacity. Overall, Gallagher Re describes redevelopment in Australia and New Zealand as a market where ample capacity and disciplined ceding strategies continue to support softer pricing for most property projects.
