New research from Autonomous has suggested there are grounds for optimism that the current reinsurance cycle is a “little more rational” than those that came before, although terms and conditions are set to face increasing pressure as 2026 progresses.
In a new report, Autonomous explained that the reinsurance cycle is often shaped by simple supply-and-demand dynamics, which typically trigger rapid price increases after major catastrophic events, followed by subsequent declines.
The previous cycle, however, was notably different, with pricing momentum starting at the 2018 renewals after the highly active 2017 hurricane season and building steadily until peaking in 2023–24.
Autonomous added that, while there is still reason for optimism that the current cycle is slightly more rational, a year of limited losses across the reinsurance space has left the industry with significantly more capacity.
“With the primary insurance industry also facing pricing pressures — particularly much of the global commercial market — there is more focus on reinsurance expenditure as a margin maintenance tool,” the firm said.
Autonomous continued, “Notably, after two years of softening, the state of the market now appears to have several similarities with the last soft cycle in 2014.
“At the 2025 January renewals, global catastrophe pricing fell by the higher end of mid-single digits, which was better than the picture we’d seen at the start of soft cycles previously.
“Fast-forward one year and the industry is now catching up with the historical norm. From that better picture in January 2025, this January, in contrast, shows the largest Year 2 price decline of a softening market, albeit the picture is now broadly consistent with the market pricing dynamic of the 2014 as well as the 2007 cycles.”
On terms and conditions, Autonomous highlighted discussions throughout 2025 regarding slippage, with several high-profile aggregate contracts reinstated.
Autonomous concluded, “Broker commentary again appears consistent in noting that reinsurers have been defending T&Cs more robustly, while cedents generally have been content banking the price saving.
“Currently, though this is largely anecdotal, we will track developments where possible through the year.
“We do note that the brokers collectively warn that T&Cs will be under greater pressure as 2026 progresses, with reinsurance pricing now at a more balanced level, brokers and cedents likely to press for greater coverage against earnings volatility.”
