Global insurer and reinsurer Arch Capital’s outlook for the midyear renewals for property catastrophe reinsurance suggests a competitive market, signalling a possible strategic adjustment in response to expected rate decreases.
During the company’s latest earnings, call Arch’s CEO Nicolas Papadopoulo commented on the property cat reinsurance space: “We don’t have a crystal ball, but I think we do expect the market to remain competitive and to adjust our underwriting stance based on the rate decrease that we will see at that time. So, we don’t really have a forecast there,” he stated.
Adding: “On the overall trend of the catastrophe portfolio, I think we have huge, huge headwinds, because of the double-digits rate decrease. And as we have said, we really monitor the property cat through the lens of 50 separate zones.
“If I go back to two years ago, they were all green. Now, we have a bunch of them that are still green. I think Florida is still green, but we have a bunch of them that are yellow and some of them that have turned red.
“So, I think it, depending on where the business we renew and our perception of the attractiveness of that zone, our underwriting team will make the decisions.”
Conversely, Arch remains optimistic about growth opportunities in casualty insurance and reinsurance, maintaining its current risk appetite in this segment.
This positivism is driven by the belief that the industry has not yet fully accounted for loss trends.
“I think that we are still optimistic on casualty, and we think that the pain has not gone through yet, as you may have seen. I think we’re still seeing some little development from the year 2016 and 17, but the most recent years, 21, 22, 23, 24, we’ve seen additional adverse development. And so, that should, in our view, continue to sustain price increases above trends,” the executive stated.
He continued: “So, in terms of our risk appetite on the insurance and the reinsurance, I think it hasn’t changed. I think we like the speciality casualty, the excess and surplus line casualty, primary position on the large accounts. So, that’s where we play.
“We stay away from the commercial Auto and also you know the larger account excess towers which we think are still very challenging, despite some of the rate increases that we’ve seen.”
The strategic caution in property cat comes from a position of financial strength, with Arch’s Q1 2026 underwriting income increasing 74.6% year-on-year, to $728 million.
This rise, according to the Arch , was driven by strong growth in the underwriting performance of both the insurance and reinsurance business units.
The re/insurer’s group-wide combined ratio in the quarter improved to 81.7%, compared to 90.1% in the comparative prior year quarter.
For this quarter, Arch’s pre-tax current accident year catastrophic losses in the insurance and reinsurance segments, net of reinsurance and reinstatement premiums, were $174 million.
Group-wide, net income available to Arch common shareholders totalled $1 billion in 2026’s first quarter, up significantly on the prior year’s $564 million.
