California wildfire losses at the start of last year failed to drive sufficient support for reinsurance pricing at the recent January 1st, 2026, renewals, while a benign Atlantic hurricane season in 2025 also contributed to property catastrophe prices coming in “a bit lower” than expected, according to Moody’s Ratings.
Globally, insured losses from natural disasters once again exceeded $100 billion in 2025, but while reinsurers took a sizeable share of the Los Angeles wildfire loss, the dominance of severe convective storm activity in the year, which are largely retained by primary insurers after the market reset in 2023, meant that overall, nat cat losses failed to significantly support reinsurance pricing.
“At the January 2026 renewals, for primary insurers, there were significant pricing declines, particularly for more risk-remote property layers at the top of reinsurance programs and across a broad range of specialty classes,” says Moody’s Ratings.
Reports from brokers reveal that, on average, global property cat rates fell by around 15% at 1.1 2026, although risk-adjusted returns are still viewed as attractive for reinsurers given the high base they’ve come off of, while Moody’s expects firms to “return more capital to shareholders through dividends and share buybacks as expected returns from underwriting move lower over the coming months.”
Back in 2023, alongside pushing up rates in the property space, reinsurers tightened terms and conditions, moved away from frequency covers and aggregate protections, and raised attachment points in order to limit volatility and return to providing balance sheet protection rather than earnings.
At the January renewals, while attachment points remained largely stable, Moody’s Ratings says that there were signs of some easing of the stringent terms and conditions enforced in 2023, driven by an increasingly competitive environment as record supply outpaced incremental new demand.
“Some cedents have reported they were able to secure coverage with lower attachment points. Reinsurers are also increasing their exposure to frequency-related coverages, such as aggregate reinsurance and second and third event coverages,” continues Moody’s Ratings.
Back in September 2025, Moody’s published its reinsurance buyer survey, highlighting a decisive shift towards rate reductions for property reinsurance, with divergent views for casualty.
“January renewals for both casualty and property lines were moderately more favorable for cedents than their expectations in our September 2025 reinsurance buyer survey,” says Moody’s Ratings. “For property coverages, 75% of respondents expected price decreases, with about half expecting price decreases of 5% or more. For casualty reinsurance, a solid majority of buyers expected premium rates to remain stable or increase by up to 5%. Overall, reinsurance prices came in a bit lower than expectations as the losses arising from the California wildfires did not create significant support for reinsurance pricing and losses from hurricane season were low.”
