Moody’s Ratings said California wildfire losses early last year failed to provide sufficient support for the latest January 1, 2026 renewals, while a mild Atlantic hurricane season in 2025 also resulted in real estate disaster prices being “slightly lower” than expected.
Globally, insured losses from natural catastrophes will once again exceed $100 billion in 2025, but although reinsurers accounted for a significant share of Los Angeles wildfire losses, the dominance of severe convective storm activity that year (mostly retained by major insurers after the market reset in 2023) meant that overall, natural catastrophe losses failed to significantly support reinsurance pricing.
Moody’s Ratings said: “At renewal in January 2026, pricing has declined significantly for major insurers, particularly in the top tier of reinsurance programs and the risk-remote property tier in the broad specialty category.”
On average, global real estate catastrophe rates are expected to fall by about 15% to 1.1 points in 2026, brokerage reports show, although risk-adjusted returns are still seen as attractive to reinsurers given their high base, while Moody’s expects companies “to return more capital to shareholders through dividends and share buybacks as expected returns from underwriting decline in the coming months.”
Back in 2023, while pushing rates higher in the real estate sector, reinsurers tightened terms and conditions, dropped frequency coverage and overall protection, and raised attachment points to limit volatility and return to providing balance sheet protection rather than earnings.
Moody’s Ratings said that while attachment points remained broadly stable at the January renewal, there were some signs of easing in the strict terms and conditions enforced in 2023, driven by an increasingly competitive environment as record supply exceeded incremental new demand.
“Some cedants reported that they were able to obtain coverage at lower attachment points. Reinsurers are also increasing frequency-related coverage, such as total reinsurance and second and third event coverage,” Moody’s Ratings continued.
Back in September 2025, Moody’s released a reinsurance buyer survey that highlighted a decisive shift in lower property reinsurance rates, but views on casualties were divided.
“For cedants, January casualty and property insurance renewals were somewhat more favorable than they had expected in the September 2025 reinsurance buyer survey,” Moody’s Ratings said. “For property and casualty insurance, 75% of respondents expect prices to fall, with about half expecting price drops of 5% or more. For casualty reinsurance, the vast majority of buyers expect premium rates to remain stable or increase by up to 5%. Overall, reinsurance prices are slightly lower than expected as losses from the California wildfires have not provided significant support to reinsurance pricing and losses from the hurricane season have been lower.”
