Moody’s Ratings expects reinsurance supply and demand to favor buyers at the key renewal date of January 1, 2026, with property catastrophe reinsurance pricing likely to fall by around 15%, depending on region and risk.
After reaching a high in 2023 following the so-called post-reset, property catastrophe reinsurance pricing has been declining throughout 2025, with prices expected to fall further at the upcoming 1.1 renewals, even as insured losses from natural catastrophes top another $100 billion.
Just yesterday, Swiss Re, one of the world’s leading reinsurers, projected that insured losses from natural cats would reach $107 billion by 2025, marking the sixth consecutive year that losses from the Los Angeles wildfires and severe convective storm activity across the United States have exceeded $100 billion.
According to Moody’s Ratings, through 2026, “Demand for reinsurance is likely to remain strong as major companies seek to reduce volatility and secure more restraints against rising property replacement costs.”
Additionally, despite high global catastrophe losses, the ratings agency noted there is no evidence of capital deterioration in the reinsurance sector, while alternative capital inflows into catastrophe bonds have once again reached record levels.
“As a result, we expect reinsurance supply and demand to favor reinsurance buyers, with property catastrophe reinsurance pricing likely to fall by around 15%, although this will vary by region and risk,” Moody’s Ratings said.
Nonetheless, analysts at Moody’s Ratings are in line with the CEOs of numerous large global reinsurers in emphasizing that risk-adjusted property cat returns remain attractive to reinsurers.
Back in July, reinsurance broker Guy Carpenter’s online index property catastrophe reinsurance rates showed a global decline of 8.1% following April and mid-year renewals, compared with a 6.6% decline on January 1, 2025, a significant change from the 29.3% increase for the full year of 2023.
During the so-called reset, in addition to significantly raising rates, reinsurers tightened terms and conditions and pushed for structural changes, notably raising attachment points to avoid frequency losses from secondary risks, a move seen as being as important to sustainable profitability as a stronger interest rate environment.
Importantly, Moody’s Ratings expects terms and conditions to remain broadly stable at 1.1, although the company is “starting to see some signs of erosion.”