At the American Insurance and Financial Analysts (AIFA) 2026 annual meeting, reinsurers generally agreed that catastrophe pricing may continue to decline into 2027 unless a larger loss event disrupts capital.
Analysts at investment bank and financial services firm Goldman Sachs reported that brokers and carriers “do not expect primary property pricing to improve in 2026 from 2025 levels,” citing strong current underwriting returns.
Goldman Sachs said pricing at renewal on January 1 was “down 15-20%” and expected a similar situation mid-year. Although the decline is rapid relative to historical cycles, the company noted that the expected return on capital for the real estate catastrophe business is “more than 20% at current levels.”
The carrier added that there was no material competition on 1/1 terms and conditions and nominal attachment points “remained broadly stable,” suggesting that structural discipline remains intact even as headline rates fall.
Goldman Sachs reported that reinsurers “are largely unanimous that catastrophe pricing is likely to continue to decline in 2027 absent a major event or series of events.” Executives pointed to a traditional pattern in which rates rise quickly after big losses and then fall within a few years.
For pricing to react meaningfully and stabilize, an event larger than the Los Angeles wildfires – with Swiss Re estimating losses at about $40 billion – is considered a potential catalyst. Current pricing levels have been described as broadly comparable to post-Hurricane Ian 2023 levels, with some brinkmanship falling back to pre-Hurricane Ian 2022 levels.
Goldman Sachs also noted that reinsurers are tracking growth in alternative casualty reinsurance capacity but “do not currently believe that alternative capacity will have a material impact on pricing.” While private capital interest is increasing, particularly on the casualty side, executives said this has not yet changed market dynamics.
In terms of geopolitical risks, the company described ongoing conflicts in the Middle East as “manageable (or not at all controllable)” and noted that wars and civil strife are generally excluded and are typically recorded separately through Lloyd’s of London.
Within Goldman Sachs’ coverage, potential risks are primarily targeted at reinsurers and large specialty insurers such as Fidelis Insurance Holdings, RenaissanceRe, Arch Capital Group, American International Group, Chubb and AXIS Capital.
Separately, analysts at Keefe, Bruyette & Woods (KBW), an investment bank specializing in financial services research, said the tone for Bermuda reinsurance companies remained positive despite lower property reinsurance pricing.
“Despite the increase in capacity, reinsurers have managed to maintain the terms and conditions and add-on points achieved in January 2023, and cedant retention remains solid,” KBW wrote. Executives emphasized prioritizing “bottom-line profitability over top-line growth,” which KBW believes is key to sustaining strong performance and proving the market is “more disciplined than in the past.”
KBW added that loss trend assumptions at 1/1 renewals “vary by business line and geography.” They believe reinsurers have “contained property catastrophes” while evaluating new opportunities such as data center protection. With a cautious attitude toward casualty insurance amid rising social inflation and loss severity, KBW noted that interest from third-party capital providers in underwriting casualty reinsurance “is rising, although this has not yet impacted pricing.”
Across both studies, the message from AIFA 2026 is consistent: underwriting returns remain strong and structural discipline remains largely unchanged. Reinsurers expect real estate and catastrophe pricing to continue to be loose in 2026 and 2027, barring a larger catastrophe or series of events that has a significant impact on capital.
appeared first on ReinsuranceNe.ws Reinsurers are largely unanimous that catastrophe pricing will fall in 2027 in the absence of major events, analysts say.
