Insurers are expected to return to the market post-renewal to capitalise on favourable conditions and explore additional protections to reduce earnings volatility, including aggregate products and structured solutions, Aon said in its January 2026 Reinsurance Market Dynamics report, in a section focused on property catastrophe.
According to the firm, insurers are now in a commanding position. Those who took a strategic approach to the renewal process and timing, and were able to leverage over-placement, achieved superior outcomes.
“Building on the positive momentum at renewals in 2025 and a benign U.S. hurricane season, reinsurance buyers achieved favourable results at the January 1 property renewals,” Aon explained.
As reported earlier this week, Aon said global reinsurer capital increased by more than 6% from the end of 2024 to $760 billion as of September 30, 2025, with growth in both traditional and alternative capital, driven by retained earnings, unrealised gains, and new inflows to sidecars and the catastrophe bond market.
With reinsurers and third-party capital providers looking to grow and deploy their abundant capital, insurers secured significant discounts and improved terms at the January 1 renewal.
Aon’s report also revealed that competition was notably more intense and widespread at the January renewal than a year earlier, with reinsurers demonstrating greater flexibility and a stronger willingness to write risks that were previously outside or at the periphery of their appetite.
“The U.S. was particularly competitive, with non-loss impacted accounts typically achieving strong double-digit rate reductions. Property reductions in EMEA, Latin America and Asia Pacific were also generally in the double-digit range for non-loss impacted accounts,” Aon said.
The firm continued, “Reinsurance demand was broadly stable, with an average 5% year-on-year increase in limit purchased at the 1/1 renewal.
“The main exceptions are Italy and Greece, where demand has increased by 10 to 20% following recent changes to natural catastrophe insurance schemes. Limit purchased also increased by 10 to 20% in Turkey due to inflation and exposure growth, which was partially offset by movements in foreign exchange rates.
“Post-renewal, insurers are expected to take advantage of favourable market conditions and premium savings to purchase additional protection.
