Reinsurance terms and conditions (T&Cs) are likely to hold heading to January 1, 2027, renewals, Moody’s analysts commented following the release of their Sector In-Depth and Outlook reports.
Underwriting discipline has remained stable in 2026, even as reinsurers continue to grow their exposure to natural catastrophe risk. Since tightening policy terms and raising treaty attachment points in 2023, reinsurers have largely avoided concessions, driving strong financial results despite high catastrophe claims. Moody’s expects this firm position to persist in upcoming renewals.
While headline terms appear stable across the market, underlying conditions vary significantly by cedent profile.
“There is clearly a higher demand from programme insurance companies to get better conditions. That’s clear, and I think we can see that also from the surveys. At the same time, there’s not a strong appetite from insurance companies to move that,” Moody’s analysts commented.
“So, we believe they will largely hold the line,” they stated. “On average, terms have seen little movement between 23 and 26, but adjustments are occurring on a case by case basis.”
Larger, more sophisticated primary carriers have leveraged their size, bargaining power, and advanced secondary peril modelling to secure minor concessions, including selectively lower attachment points and tailored aggregate structures, analysts explained.
Reinsurers may also feel more comfortable with larger carriers, which are often the most sophisticated in managing and pricing these risks.
Analysts said: “If some companies manage to get better terms, and on average we see no difference, that also means that for some other companies they actually got stricter terms and conditions, and we have seen actually some attachment points going up for for some smaller insurance companies, and so that’s also how I think the reinsurance companies are managing their entire portfolio.
“So, on average, they try to stick to that, and again because they know that that was a key reason why they got better profitability in the last three years. It’s not only a question of pricing. It’s clearly a question of terms and conditions, and that’s key. So, we don’t think we can say that nothing will happen.”
What will happen with T&Cs will also depend on catastrophe activity through the remainder of the year. While 2026 has experienced relatively moderate loss activity to date, the North Atlantic hurricane season is yet to be over, with its peak usually expected from late August to September.
How this season unfolds will have some leverage in terms of negotiation power, according to analysts.
