Major US insurer Travelers will be able to “significantly improve” its reinsurance coverage ahead of a key renewal date on January 1, 2026, in part due to better pricing, while also renewing its 20% quota share (QS) with Fidelis, chief financial officer (CFO) Dan Frey said recently.
Earlier today, Travelers reported strong results for the fourth quarter and full year 2025, with net profit increasing in both periods and combined ratio improving as underwriting results strengthened year over year.
The carrier also released details of an updated 2026 catastrophe excess of losses (XoL) reinsurance program, revealing lower retention rates and a new $1 billion lower tier.
Most recently, during the company’s fourth-quarter and full-year 2025 earnings call with analysts, CFO Frey commented on the recent renewals, noting that Travelers was “very pleased with the changes.”
The program’s retention level is $3 billion in 2026, down from $4 billion in 2025, while the new $1 billion lower tier means the company’s total reinsurance recoveries for eligible losses will be $4.675 billion, up from $3.675 billion in 2025, while the deductible per loss remains unchanged at $100 million.
“We believe total catastrophe is the most effective way to protect our balance sheet. The combination of our industry excellence, sound reinsurance structure and more favorable reinsurance pricing allows us to meaningfully increase our coverage with only a modest increase in our total reinsurance premium costs,” Frey said.
Back in 2023, Travelers signed a quota share contract with Bermuda-based reinsurer Fidelis Insurance following a strategic minority investment in the company. The agreement has been renewed until 2024 and 2025, with Frey confirming today that the quota share has been renewed again.
“In addition, for 2026, we continue to value our relationship with Fidelis and are pleased to renew our 20% quota share with them again. The renewal includes the same loss rate cap that we have had since the start of quota share in 2023,” Frey said.
Additionally, the CFO revealed that Travelers has updated its enhanced casualty reinsurance program, which was first launched in 2025. “We are once again able to purchase working-level insurance on a roughly profit-neutral basis,” he said.
Regular readers will note that property catastrophe reinsurance rates have dropped further at 1.1 renewal in 2026, with conditions particularly favorable to buyers. Travelers have taken advantage of the current market dynamics and decided to purchase more insurance for the coming year while managing to reduce retention rates with only a slight increase in spend.