Howden’s January 1 2026 reinsurance renewal report has revealed that risk-adjusted global property-catastrophe reinsurance rates-on-line decreased by an average of 14.7%, accelerating from an 8% fall in 2025 and marking the largest year-on-year reduction since 2014.
According to the report, most areas of the market recorded price decreases at the January 1 2026 reinsurance renewal, bringing pricing back to levels last seen around four years ago, albeit with comparatively higher attachments and tighter terms.
David Flandro, Head of Industry Analysis and Strategic Advisory, Howden Re, commented, “The 1 January 2026 renewal confirms that pricing momentum has turned decisively, with risk-adjusted reductions across most major lines bringing rates back towards levels last seen around four years ago.
“The shift has been driven by strong retained earnings and record ILS issuance, increasing capacity and competitive tension. This is not a return to the underwriting practices of the last soft market.
“Attachments remain elevated by historical standards, terms and conditions are tighter; capital is being deployed selectively. The result is a market that is softening but still rational – one that continues to price volatility appropriately and create economic value for investors.”
Focusing on the global property-catastrophe segment, Howden observed that despite another year of elevated catastrophe activity, led by the largest insured wildfire loss ever in Los Angeles, placements continued to complete with sizeable rate decreases and improved terms.
As mentioned, risk-adjusted global property-catastrophe reinsurance rates-on-line declined by 14.7% on average, accelerating from the 8% fall recorded in 2025.
In the US, Howden noted that cedents benefited from strong supply, with reinsurers willing to deploy capital at what remained attractive margins despite rate reductions. As a result, programme-wide decreases generally ranged between 10% and 20% on a risk-adjusted basis.
Meanwhile, in Europe, the report found that low-loss activity, an oversupply of capital and reinsurers’ desire to defend top lines shaped renewals, with programmes recording average rate decreases of between 10% and 20%.
“The degree of softening varied by market, with outcomes influenced by historical loss experience. France, Italy, Switzerland and the UK recorded the largest rate reductions (down 15% to 20%) whilst Germany, where direct placements are prevalent, experienced more moderate softening (down 8% to 11%),” Howden said.
At the same time, renewals in the Asia Pacific region were said to be competitive at 1 January 2026, as cedents built on mid-single-digit reductions in 2025 to capitalise on abundant capacity. Risk-adjusted pricing for loss-free non-proportional programmes generally fell by 10% to 20%.
Tim Ronda, CEO of Howden Re, said, “Healthy supply dynamics and increased competition, particularly in property-catastrophe, created a genuine re-balancing of the market at this renewal.
“This, in turn, created meaningful opportunities for Howden Re clients in securing broader coverage, improved structures and attractive pricing, even as risk remained structurally elevated. Howden Re’s role at this renewal was to help clients navigate a more competitive, but still disciplined environment.
“The best outcomes were achieved through working with markets and capital providers to execute holistic, data-led programme solutions that balanced pricing, structure and risk transfer across portfolios.”
Turning to the casualty space at the January 1 2026 reinsurance renewal, Howden noted improved market conditions, reflecting stronger supply dynamics.
In the US in particular, outcomes were described as performance-driven against a backdrop of persistent long-tail loss development, ongoing reserving concerns and sustained demand for protection.
“Overall, capacity remained steady, meaning most treaties renewed at expiring terms at 1 January 2026. The trend towards greater syndication continued, reflecting typical line-size constraints and the high number of markets competing for shares on programmes. The expanding role of casualty ILS and sidecars was an additional important factor in the US renewal process,” the firm’s report added.
Concurrently, the international casualty market experienced modest softening at renewal, with widespread price reductions driven by increased capacity and a generally stable loss environment.
As expected, Howden suggested that programmes with US exposures faced more challenging renewals, with outcomes sensitive to loss volatility associated with nuclear verdicts.
“Casualty buyers in the London market benefitted from strong supply, resulting in 5-10% risk-adjusted reductions for excess of loss programmes at 1 January 2026. Continental Europe also saw increased capacity at 1 January 2026, with strongly performing excess of loss programmes achieving similar risk-adjusted rate reductions of between 5% and 10%,” Howden’s report explained.
Elsewhere, despite elevated geopolitical risks, performance across most specialty reinsurance lines remained strong, generally translating into improved outcomes for cedents at the January 1 2026 renewal.
Howden continued, “Increased clarity around losses from ongoing conflicts and other recent events, whilst painful for exposed carriers, removed an overhang of uncertainty, enabling buyers to capitalise on broadly favourable market conditions.
“This dynamic across specialty was evident in credit and political risk, construction, cyber, marine and energy and political violence and terrorism, where strong underlying portfolios and abundant capacity benefited buyers. Aviation bucked the softening trend, with a slight firming of conditions following a series of losses in 2025.”
In property retrocession, capacity at the January 1 2026 renewal comfortably exceeded demand, even as market dynamics became more balanced, with buyers considering up to $800 million of additional limit.
Favourable supply dynamics were supported by retained earnings from several years of strong performance, as well as new entrants and ILS inflows.
At the same time, the loss environment remained manageable, with the Los Angeles wildfires affecting only a small number of programmes and impacts mitigated by expected subrogation recoveries.
“A combination of these dynamics drove price softening at 1 January 2026, with risk-adjusted pricing falling by between 12.5% and 21%, although outcomes varied widely depending on coverage scope, attachment points and underwriting profitability. There was more limited movement on terms, with retrocessionaires typically unwilling to broaden coverage to include non-natural perils such as SRCC and terrorism,” Howden said.
Overall, Howden said that the broader market conditions outlined earlier in this piece are expected to persist into 2026, barring any major macroeconomic or sector-specific events, supported by strong capitalisation and reinsurers’ continued focus on defending market share.
The firm’s report added, “The market nevertheless remains sensitive to losses, financial volatility and elevated costs of capital, underscoring the fragility of conditions to any acute adverse development.
“This backdrop brings opportunities across the value chain. Buyers are benefitting from rate reductions and improved terms as supply exceeds demand in most areas, whilst underwriting performance remains strong, delivering healthy profits and returns on capital.
“Buyers are well positioned to secure additional protection in a period of elevated risk, heightened shock potential and favourable market conditions.
“For carriers, the transition rewards underwriting excellence whilst incentivising innovation to unlock new risk pools and generate incremental premium volume.”
David Howden, Founder & CEO, Howden, concluded, “The message coming from our analysis of re/insurance markets is clear: this is a rare moment where everyone stands to benefit. We’re in the midst of a softening market where prices are falling despite elevated political and economic volatility.
“By doing more to harness data, anticipate future risks, and innovate to respond to the needs of clients, re/insurers can stay ahead of the curve and continue to be profitable.
“This will mean that clients will have even greater choice to better protect themselves from unexpected shocks, whether political, cyber-related, litigation-driven or property-based. So 2026 will be a year of enormous possibilities. It’s up to both businesses and re/insurers to take advantage.”
