The effects of a softening reinsurance market are becoming more evident, according to investment research firm Autonomous, which says sustained pricing declines are beginning to weigh on revenue growth and are expected to put greater pressure on underwriting performance over time.
In its latest report, Autonomous said the final major renewal season of 2026 has now concluded, with property catastrophe reinsurance pricing weakening at each successive renewal. The firm said pricing declines widened from the mid-teens at the January renewals to the high teens in April, before reaching reductions of 20% or more during the June and July renewal period.
Autonomous estimates that the June and July renewals account for around 15% to 20% of annual reinsurance volumes across its coverage universe, compared with roughly 50% to 60% that renew at 1 January.
It said recent commentary from brokers on mid-year renewals has been shaped by structural improvements in the Florida market, where lower expected losses for reinsurers have added further downward pressure to pricing.
The firm pointed to analysis published by Marsh/Guy Carpenter, which compared insured losses from Hurricane Milton in 2024 with those from Hurricane Irma in 2017, highlighting a 69% reduction in claims frequency and a 74% reduction in claims severity.
Autonomous said upcoming second-quarter results should provide a clearer picture of how individual reinsurers have been affected by the latest renewals, including the impact on pricing and premium volumes. However, it expects the trends seen during earlier renewal periods to have continued through the mid-year season.
According to Autonomous, the cumulative effect of consecutive rounds of price reductions is now becoming increasingly apparent as renewals are measured against an already softer market.
The firm said property catastrophe reinsurance rates have broadly returned to levels last seen in 2022, before the market’s pricing reset in January 2023. It added that the Guy Carpenter property catastrophe rate index is now only 1% above its average level recorded between 2020 and 2026.
Autonomous also noted that the pace of the market’s decline has exceeded its own expectations, as well as those of many investors. In its view, this partly reflects the market catching up after a more gradual easing in 2025. The report noted that the 16% rate reductions seen in 2026 are considerably steeper than those recorded during the second year of each of the previous four soft market cycles.
While Autonomous does not expect weaker pricing to feed through immediately to earnings, it believes the impact is already beginning to emerge. The firm stated that revenue growth is facing increasing pressure and expects those headwinds to continue. It added that underwriting margins have so far remained robust, although favourable loss experience has helped to cushion the effect of lower pricing.
Autonomous highlighted comments from SCOR earlier this year that renewals would create a two-point headwind to the combined ratio on an expected premium basis. It also noted that Munich Re’s guidance for a full-year 2026 combined ratio of “around 80%” has effectively shifted towards an expectation that the outcome is now more likely to be above 80% than below.
According to Autonomous, continued benign loss activity has helped offset some of the immediate pressure from weaker pricing, while company-specific measures, including cycle management and stronger releases from prior-year reserves, could continue to provide support.
