Reinsurance broker Gallagher Re has shared its expert commentary on property lines in the United States at the January 1, 2026, renewals, highlighting that “pricing declines for property cat were greater than expected on average.”
According to Gallagher Re’s ‘First View: Options and Opportunities’ report, a surge in available capacity and a relatively quiet Atlantic hurricane season drove pricing down as year-end approached.
“Although renewals generally completed later than in previous years, the global property market was dynamic at 1.1.2026, as clients benefited from the continuation of healthier market conditions supporting a sufficient and responsive supply of capacity,” Keith Lippman, Global Head of Property, commented.
For property cat, the report indicated that reinsurers aimed for moderate decreases in pricing at the quoting stage, generally targeting a range from flat to a 10% reduction.
Analysts noted that it was clear early on that capacity was abundant, with reinsurers signalling potential increases ranging from 10% to over 50% during the quoting process.
Some cedents purchased more limit either at the top or bottom of their programmes, but generally, spend is expected to be down between 5% and 10% overall.
Loss-free cat XoL program renewal rates decreased by between 10% and 20% on a risk-adjusted basis, according to Gallagher Re. For loss-impacted programs, primarily from last January’s wildfire and local severe convective storm events, rates were generally flat to down 10%.
Lippman commented: “The devastating and tragic California wildfires were a difficult start for the global reinsurance industry, given the relatively concentrated loss among a smaller number of carriers and high reinsurance utilisation among those carriers.
“While the remainder of the year proved benign for peak-peril losses, secondary perils were again a driver of global insurance catastrophe losses, with total estimated insured losses exceeding USD120 billion.”
Beyond pricing, the January 1 renewals signaled a “rebound” for well-structured aggregate programmes. Lead catastrophe markets showed a renewed willingness to support clients holistically, easing the capacity constraints that had defined previous years.
“While buyers’ focus was largely on price, there was also momentum to clean up non-concurrencies where any still existed from prior year renewals,” analysts added.
Noting: “Differentiation was prevalent as reinsurers applied an evolving view of risk metrics to individual cedants; changes in underwriting guidelines, primary pricing trends, deductible adjustments, loss performance and other metrics were key factors in individual outcomes.”
For property risk, the report stated that excess capacity in the market generally benefited results, “but renewal results were more nuanced. Quotes were typically near flat, but as with cat placements, reinsurers showed flexibility in final outcomes.”
Renewal outcomes were primarily determined by individual experience and the characteristics of each account. Free-loss programs saw an average price reduction of 5% to 10%, while those that sustained losses remained flat or increased by up to 5%, with significant variation in results.
For Pro Rata business, the report found that there was ample capacity for proportional placements, despite a reduction in margins for reinsurers.
Ceding commissions, which had been between -1.5% and 0%, improved, which indicates a more favourable assessment of risk and a decrease in pricing for any catastrophe coverage included in the reinsurance treaty.
Analysts concluded: “The timing of firm orders was late, because clients expected and experienced softening in pricing as renewals went on. There were improvements to both terms and conditions, and wordings subjectivities, with many reinsurers agreeing to more standardized terms.
“Many reinsurers were open to reviewing new carriers and opportunities while some kept their focus and growth in capacity with current carrier clients.”
