A new report from JPMorgan suggests that reinsurers are better prepared than ever for market weakness, although lower prices are expected to eventually catch up with the industry, especially given that catastrophe losses in the first quarter of 2026 are likely to be well below normal levels.
JPMorgan expects total insured losses from natural catastrophes to be approximately $10 billion in the first quarter of 2026, well below the historical normal range of approximately $15 billion and significantly lower than the approximately $45 billion in the first quarter of 2025.
According to reports, the biggest events in the first quarter of 2026 were Winter Storm Fern in the United States in January and Storm Nils in France in February.
Commenting on Winter Storm Fern, J.P. Morgan said: “The storm brought freezing temperatures, heavy snow and freezing rain to parts of the United States, causing damage.
“While overall the Winter Storm Fern event is costly, we believe Winter Storm Fern is likely not to be a particularly large event for the reinsurance industry and we expect the majority of the loss burden to be borne by the major insurers.”
Fitch Ratings said Winter Storm Fern is expected to cause insured losses of $4 billion to $7 billion, in line with other estimates.
At the same time, according to a report by JPMorgan Chase, the war in the Middle East has not caused much insurance losses at this stage.
The company added: “War exclusions in insurance have been fully tested, so we do not expect material exposure at this stage. We assume that natural catastrophe budgets in Q1 2026 are likely to be utilized by ~50% of reinsurers with significantly better experience than Q1 2025, which was impacted by the Los Angeles wildfires.”
JPMorgan also highlighted that reinsurance pricing for property catastrophe lines is falling at a relatively rapid pace in 2026, following three years of outstanding reinsurer returns from 2023-25.
“Minor catastrophe claims benefit reinsurers’ reported performance but do not help stem market price declines,” the company explained.
JPMorgan continued, “We do see reinsurers better prepared than ever for market weakness, but at some stage the price decline will catch up to the industry. We expect that at this stage of the year reinsurers will, in some cases, add a natural cat ‘good luck’ to reserves by making more conservative assumptions.”
“In the most recent April renewals, we have seen continued declines in real estate catastrophe prices, with mid-teens declines in the Japanese business. U.S. rate declines have also continued to accelerate, with U.S. real estate catastrophe prices down -14% at renewals compared to -12% at renewals on January 1, according to Guy Carpenter. Looking ahead to mid-year renewals that focus more on the U.S. business, we expect similar trends to continue.”