While acknowledging that double-digit declines in property catastrophe pricing are a steep adjustment to digest, JP Morgan said it does not expect the weak renewals to affect top European reinsurers’ net income guidance, noting that market participants had largely anticipated these pricing reductions when the guidance was established.
In a new report on the matter, JP Morgan observed that the January 1 renewals represent a critical juncture for the global reinsurance market, with approximately 60% of total business typically renewing during the period, making it a key indicator of pricing, terms, and capacity trends for the year ahead.
“2026 has seen the softening continue with double-digit price declines in property catastrophe pricing. We had anticipated a weak renewal based on the industry supply demand dynamics and excellent reinsurance results in 2025, but this is still a steep decline to digest in our view,” the firm added.
As we’ve previously reported, reinsurance broker Guy Carpenter’s Global Property Catastrophe Rate on Line Index was down 12% at the January 1 2026 renewals, with per risk placements flat to down 15% depending on region.
JP Morgan’s analysts noted that large European reinsurers typically provide earnings guidance ahead of the January renewals, and that the three companies which issued guidance for the year ahead all pointed to earnings growth in 2026 compared with 2025.
“We do not see the weak renewals impacting net income guidance for any of the reinsurers as we believe that the declines seen were largely expected by the players at the stage that guidance was set,” they explained.
JP Morgan continued, “Property catastrophe prices play a part for the reinsurers but do not represent the whole picture for a European reinsurer, and therefore the price reductions reported will be far smaller than those given by the reinsurance brokers.
“We think that 2014 and 2015 are the most similar years to 2026. In both years, prices in property catastrophe lines were down ~11% compared to the 12% decline seen at the beginning of 2026.
“The price declines reported by the reinsurers were between 2-4% compared to the Guy Carpenter reduction of 11%.
“We expect that price reductions reported by the European reinsurers will be similar, with similar reductions seen at Swiss Re and Hannover Re to those seen in 2014, with Munich Re likely to have a slightly higher price reduction than 2.4% in 2026.”
JP Morgan concluded, “The more difficult part to determine, in our view, is what happens to growth. Theoretically, lower pricing should equal lower premium growth, but this is not always the case. The 2014 renewals saw premiums shrink at Munich Re and Swiss Re but grow marginally at Hannover Re and SCOR.
“Our sense presently is that Swiss Re could shrink the book at the January renewals, with Munich Re remaining relatively stable. Hannover Re (exc structured solutions) and SCOR could potentially grow in our view, but we would be surprised if this is anything materially more than low to mid single digits.”
