According to recent analysis by US-based investment bank and research firm, TD Cowen, rate declines, most notably in property, are pressuring top-line growth and underwriting results for specialty and reinsurance carriers in 2026.
During the recent April renewals, which are heavily Asia-focused, brokers noted a 15-20% decline in Japan property-cat reinsurance pricing, and this trend is set to follow into the US property cat market at the mid-year, according to industry commentary.
Global re/insurance group Aon estimated that global demand rose by 10%, with some insurers lowering retentions and raising limits, which was offset by a significant increase in global reinsurance capital, which increased to $785 billion at year-end 2025.
TD Cowen’s analysts said, “These rate declines at April renewals are part of a continued trend in global reinsurance as they follow 10-15% rate decreases at the January renewals at the start of this year. We expect pricing pressure in property-cat reinsurance to persist through 2026, including the FL mid-year renewals.”
Looking ahead to the mid-yer renewals, which are focused on the US and notably Florida, analysts said that Florida should see some incremental reinsurance demand given the shift of more than 600,000 policies since year-end 2024 from Citizens to private insurers.
The analysis emphasises that, in the future, property cat reinsurance pricing pressure is expected to persist post-2026, in the absence of a very sizeable or unexpected catastrophe loss.
In March, analysts note that E&S premiums for the three largest states (California, Florida, and Texas) increased by 11% year-on-year, an improvement from the 7% decline in January, and 2% growth in February.
TD Cowen explained, “We expect that this pressure is largely driven by increased competition and declining rates (particularly in property), as opposed to business moving back to the admitted market. To this end, growth in the number of filings at these three stamping offices has remained robust. Stepping back, we expect E&S lines to continue gaining share within the overall P&C market and growing ahead, but at a slower pace relative to recent elevated levels.”
Additionally, casualty reinsurers are still benefitting from the primary rate increases of their cedents, as the reinsurance rates have been “more flattish,” according to analysts, with some incremental pressure on ceding commissions.
The report said, “While we understand certain cedants prefer a traditional reinsurer counterparty, casualty sidecars including insurance-linked securities (ILS) have started to proliferate, creating some incremental competition and pricing pressure. While the market impact to date has been minor, this is an area to watch going forward.”
Analysts expect overall catastrophe activity to be roughly in line with or modestly below a typical Q1, but still much improved year-on-year, given the very costly California wildfires in Q1’25.
“Given the nature of activity, we expect much of the losses will remain in the primary market, with more modest impacts on reinsurers. Further, we expect losses related to the Iran war to be manageable.”
