Howden has revealed that the January 1 casualty reinsurance renewals benefited from improved supply and demand dynamics, with performance-driven US outcomes amid ongoing long-tail and reserving pressures, while international placements were generally stable despite tougher renewals for programmes with US exposure.
According to the firm’s latest renewal report, the US casualty reinsurance market experienced largely stable conditions at January 1, despite a liability loss environment still shaped by social inflation, with overall capacity steady and no material change in the number of active reinsurers.
Meanwhile, the trend towards greater syndication reportedly continued, reflecting, Howden explained, typical line-size constraints and the high number of markets competing for shares on programmes.
Expanding on the US casualty reinsurance market, the firm’s report continued, “Another important factor in the renewal process was the expanding role of casualty ILS and sidecars, which are now being actively pursued by many cedents, particularly those able to offer large, stable portfolios that appeal to investors.
“In addition to increasing supply, these vehicles are also removing some premium from the open market, reducing the amount cedents need to place traditionally. Whilst this has not yet had a meaningful impact on the traditional casualty reinsurance market, a continuation of the trend could begin to influence supply-demand dynamics over time.”
Elsewhere, Howden reported that reinsurers were looking to increase allocations in the US casualty market at renewal as property rates eased and catastrophe-exposed premiums contracted.
Clients continued to show strong interest in whole-account deals combining property and casualty lines, seeking more efficient transaction structures, Howden observed.
Most treaties renewed at expiring terms on January 1 2026, and cedents with robust data and a proven track record are said to have successfully negotiated higher ceding commissions, with some achieving increases of 0.5–1 point.
Conversely, loss-affected accounts faced commission pressure and reduced shares as reinsurers sought to offset elevated claims.
Howden noted that loss development from 2014–19, alongside more recent accident years, heavily influenced 2026 negotiations.
Ongoing reserving concerns and adverse trends are expected to sustain casualty rate increases of 8–9%. Despite rising costs, demand for protection remains strong, leaving the US casualty market well-positioned.
Turning to the international casualty market, Howden said this space experienced modest softening at 1 January renewals, with widespread price reductions due to increased capacity and a generally stable loss environment.
“Programmes with US exposures faced more challenging renewals with outcomes sensitive to loss volatility associated with nuclear verdicts. Programmes showing signs of loss deterioration typically saw pricing increase,” the firm said.
Howden continued, “Buyers in London market casualty benefitted from strong supply, with incumbents looking to deploy capacity not used in the property market to meet broader growth targets. The market also saw increased participation from several US and Bermudian reinsurers.
“This reflected another year of strong performance, with results still benefiting from reduced line sizes following Decile 10 and the subsequent hard market. Whilst claims inflation and falling rates are beginning to drive modest deterioration, claims activity has been limited, which has tempered any experience account deterioration.
“With underlying account dynamics remaining broadly stable, reinsurer results continuing to be profitable and capacity plentiful, London casualty excess of loss programmes recorded risk-adjusted reductions of 5-10% at 1 January 2026 renewals.”
