Slide Insurance CEO and founder Bruce Lucas noted on the company’s latest earnings call that risk-adjusted property reinsurance rates will trend downward in 2026, and while the magnitude is uncertain, early indicators in the catastrophe bond market point to a significant shift.
Slide recently issued $320 million in ILS (insurance-linked securities) bonds, with risk-adjusted pricing down more than 20% year over year, according to Lucas.
While the catastrophe bond’s pricing is a strong indicator, the executive remains cautious about its impact on traditional reinsurance rate movements.
He said: “I don’t know whether traditional reinsurers will be involved in this area, so I will avoid providing any guidance on this point.
“It can be said that our guidance does incorporate a reduction in reinsurance expenses, but we will not know the extent of the reduction until we make further progress ahead of our 6/1 renewal.”
“I believe risk-adjusted rates will fall in 2026. I just can’t comment on the magnitude of that. I do think risk-adjusted rates are lower and our cat bonds do reflect that. You also get the overall diversification benefits from the reinsurance tower as you expand into a broader geographic area,” he emphasized.
Although interest rates may fall, Lucas expressed confidence that insurance margins will remain stable.
“It’s a significant driver and we’ll need a few months to go through the update process to better understand what’s going on with it and its potential impact on rates. I do feel confident that there are some things to say about reinsurance,” the executive said.
He continued: “First, I believe that even if reinsurance prices fall, margins will remain the same. They are in lockstep with each other. The bottom line numbers should not be affected by falling rates.”
Lucas also emphasized that Slide’s geographic diversification is a key component of the company’s strategy to offset changes in the market.
“Secondly, there are tremendous reinsurance synergies to be gained by expanding our operations beyond Florida and South Carolina,” the CEO said. “That’s really what we’re focused on.
“We expect to launch excess and remaining lines in California in the next 30-60 days. We are on track to launch the Northeastern states, New York, New Jersey and Rhode Island later this year. There are many other E&S areas that we will launch later this year.
“So we think even though rates may come down a little bit this year, we still believe our top-line growth is on the upswing given the diversification, the new state launches and our underwriting, Slide has just accelerated in the last nine months in Florida. So, it’s a good trend right now.”
Lucas also talked about the potential for Slide — a government-backed entity designed to serve as an “insurance company of last resort” — to bring food delivery to more Florida citizens.
He said: “The main driver in determining whether these policies are suitable will be the cost of reinsurance. We don’t know what will happen in the reinsurance market this year. From all indications, it appears to be a price reduction market, which will be good for consumers. This will open up a range of new policies that will be beneficial to us.
“We do think there are ongoing opportunities for the Citizens. I can’t quantify those opportunities at this time, but suffice to say, it’s smaller than what we’ve seen in previous years.”
