JPMorgan acknowledged that the double-digit decline in real estate catastrophe pricing was a sharp adjustment to digest, but said it did not expect the renewal weakness to impact reinsurers’ net income guidance, noting that market participants had largely anticipated these pricing reductions when the guidance was set.
In a new report on the matter, J.P. Morgan noted that January 1 renewal is a critical moment for the global reinsurance market, with approximately 60% of total business volume typically renewed during this period, making it a key indicator of pricing, terms and capacity trends in the year ahead.
The company added: “Real estate catastrophe pricing will continue to be soft in 2026, with double-digit price declines. Based on industry supply and demand dynamics and excellent reinsurance performance in 2025, we expect renewals to be weak, but we believe this will still be a sharp decline to digest.”
As we previously reported, reinsurance broker Guy Carpenter’s Global Property Catastrophe Rates Online Index fell 12% at renewal on January 1, 2026, with each risk allocation flat to down 15%, depending on region.
JPMorgan analysts pointed out that large European reinsurers usually provide profit guidance before policy renewals in January, and the three companies that issued guidance for the next year all pointed to an increase in profits in 2026 compared with 2025.
“We do not believe that weak renewals will impact any reinsurer’s net profit guidance as we believe that participants have largely anticipated the decline in net profit at the guidance stage,” they explained.
JPMorgan continued: “Property catastrophe prices have an impact on reinsurers but are not representative of European reinsurers as a whole, so reported price reductions will be much smaller than those given by reinsurance brokers.
“We believe 2014 and 2015 are the years most similar to 2026. In both years, real estate disaster line prices fell approximately 11%, compared with a 12% decline in early 2026.
“Reinsurers reported prices down 2-4%, while Guy Carpenter’s prices were down 11%.
“We expect European reinsurers to report price cuts of similar magnitude to 2014, Swiss Re and Hannover Re to report similar magnitudes to 2014, and Munich Re to likely see slightly more than 2.4% in 2026.”
JP Morgan concluded: “We believe the harder part to determine is what happens to growth. In theory, lower pricing should equal lower premium growth, but that is not always the case. Premiums fell at Munich Re and Swiss Re at renewals in 2014, but increased slightly at Hannover Re and SCOR.
“Our current sense is that Swiss Re is likely to reduce its book size at renewal in January, while Munich Re remains relatively stable. We believe Hannover Re (excluding structural solutions) and SCOR are likely to grow, but we would be surprised if the numbers materially exceeded the low to mid-single digits.”