Chris Dittman, head of Florida strategy at Aon Reinsurance Solutions, said recently that, as expected, reinsurance supply continues to outpace demand ahead of the key renewal date on January 1, 2026, with the broker expecting rates to fall 10% to 15%.
Dittman’s comments came during a session on the first day of the 2025 Florida Chamber of Commerce Annual Insurance Summit, where experts discussed 1/1 reinsurance rates and the outlook for mid-year renewals in Florida.
“We’re in the throes of a 1/1 2026 renewal, which I think seems a little late, we’re now in the first week of December and I think from an Aon perspective we’re a little behind in terms of firm orders in the market,” Dittman said. “But from what we’re seeing so far, as expected, the supply of reinsurance still exceeds demand, and we’re seeing rate levels fall by 10 to 15 percent to 1/1.”
As rates fall, Dittman expects cedants to purchase reinsurance “more vertically” and noted higher retention rates during the 2023 reset. “So whether we see some buying reductions or some sideways totals and things like that, there’s a lot of discussion around that, it’s going to be a different product, probably at a different rate level, but it’s going to help with the supply of reinsurance that everybody here wants to provide. Obviously, the catastrophe bond market is pretty frothy right now, so I think we’re going to break records this year.”
Dittman noted that as of Jan. 1, these reductions are clearly not specific to Florida, but are mostly for plans nationwide. While these declines may sound significant, Dittman reminded viewers that 2023 is the toughest market in most, if not all, people’s careers, so it’s important to judge declines against a high base.
“I would say, it’s interesting to me because I’ve spent so much time in Florida, last year we had two hurricanes that made landfall in Florida, Category 3 or larger, but we’re not talking about that,” he continued. “We did, touch wood, go through this whole year, and I think we’re now done with the hurricane season, technically without any incidents, so that’s good. But we’re only a year away from two Category 3-plus hurricanes in Florida, and no one is talking about that. If this was 2018 or 2019, everyone here would be talking about Hurricane Irma.”
Dittman is also keen to highlight the positive impact of Florida’s reforms and new legal environment.
“As we sit here, sending our submissions to the market and discussing loss costs, it’s important not to have to deal with the social inflation factor that no one can price the business that we’re writing about, and we need to do everything we can to keep that going. That’s been really, really helpful,” he said.
Justin O’Keefe, senior vice president and chief underwriting officer at RenaissanceRe, elaborated on what Florida looks like in 2025 and the outlook for 2026, explaining that without the impact of the California wildfires, this year’s June 1 rate reduction would have been even larger.
“So the California wildfires impacted the global reinsurance catastrophe market and created a lot of uncertainty, and as earnings and capital in the reinsurance market moved into June 1, it probably dampened the level of decline in rates that I still think we’re going to really see going into 2026,” O’Keefe said.
Adding: “We’re a reinsurer and you might ask why you’re talking about rate cuts, why do you have a smile on your face? I have a smile on my face because I think risk is more predictable today than it was three years ago and we can put more capital into the system with more confidence, which means we don’t need the same high margins to take on risk as we did before tort reform.
“So I fully expect the Florida homeowners market to be up for renewal on June 1, and I would say our customers will see a significant increase in their reinsurance rates, which I think is good for everyone and the sustainability of the Florida market.”
John Seo, co-founder and managing director of Fermat Capital Management LLC, an investment manager specializing in catastrophe bonds and insurance-linked securities (ILS), who also attended the meeting, said he has seen interest rates drop twice as much as the rate Chris mentioned in Florida itself.
“The catastrophe bond market tends to be a leading indicator. If rates go up, you see it in the catastrophe bond market first. But when rates go down, you see it in the catastrophe bond market first because it trades every day. It’s a big global market and it’s not tied to traditional insurance dates like January 1 or June 1,” Seo said.
