Risk-adjusted property catastrophe pricing reduced by 10% to 20% on average at the January 1st, 2026, reinsurance renewals, with many buyers focused on “down pricing” rather than “up risking”, according to reinsurance broker Gallagher Re’s latest 1st View report.
The report highlights greater availability of reinsurance capacity, which created more choice, change, and opportunity for buyers at the key 1.1 renewal season.
Gallagher Re states that many cedents prioritised price reductions, although there were instances where some buyers achieved a “rational tradeoff” between price and enhanced coverage in buying down to reduce volatility, a trend Gallagher Re expects to accelerate in 2026.
Ultimately, buyers of protection approached the catastrophe renewal with varying objectives and sellers were more accommodating than in the last few renewals.
While risk-adjusted catastrophe rate reductions were larger than expected, the broker states that returns in the market are still largely viewed as adequate.
“The global property market was dynamic at 1.1, as clients benefited from the continuation of healthier market conditions supporting a sufficient and responsive supply of capacity,” states Gallagher Re.
In the casualty space, the key discussion points at 1.1 2026 were still concerns over the US litigation landscape, prior year loss development, and elevated loss trends. Competition among sellers for international casualty was healthy at Jan 1, while appetite continued to grow as reinsurers searched for growth and diversification. This all led to ceding commission trending upwards and rates down 5% to 10%.
In the specialty market, Gallagher Re highlights a continued oversupply of capital and significant increased appetite for all specialty lines at the renewal.
Tom Wakefield, Global CEO for Gallagher Re, said: “The 1.1.26 renewal represented further price reduction and structural flexibility. Technical pricing, geography, loss history, and line of business all influenced how much programs changed.
“Our top priority for the year ahead is working with our clients to tailor their reinsurance buying strategies at a moment of abundant capacity across all lines of business. There are plenty of options and opportunities to improve reinsurance coverage, and we intend to explore all of them.”
The broker’s latest 1st View report also discusses reinsurer capital, revealing that dedicated capital is expected to hit record highs at year-end 2025, with roughly 8% growth in traditional capital to $710 billion, and alternative capital growth of 12% to $128 billion, taking total capital in the sector to $838 billion.
Additionally, the report finds that reinsurance sector profitability should remain sustained, with a headline return on equity (ROE) of approximately 17-18% for 2025, which is at least in-line with 2024 and potentially the second-best ROE in the past decade, according to Gallagher Re.
The impressive growth of the insurance-linked securities (ILS) market is also discussed in the report, with cat bond issuance surpassing $20 billion for the first time in a single year.
“In a renewal where the quality of reinsurer relationships and consistency of terms were front of mind, cedants were able to reflect on recent hard-market negotiations and consistent service standards including claims payment performance. Concurrency in price and coverage was achievable and prioritized,” says Gallagher Re.
