MediumVII Reinsurance & Specialty Risk29 October 2026, Thursday

Reinsurers expect property catastrophe rate cuts to slow in January

Everest chief executive Jim Williamson said on 29 October that he expects further rate cuts in catastrophe and peak zones at 1 January, though returns remain very strong. A day earlier RenaissanceRe's David Marra said property catastrophe rates would fall by less in January than the mid-teens decline the firm has seen since the start of the year.

Location: BERMUDA

Demand growth is slowing. According to Marra, property catastrophe demand added 20 billion dollars of limit in the year before 2024, 15 billion dollars in 2024 and 10 billion dollars last year; single-digit growth is now expected. Catastrophe bonds may press even harder on the upper layers of programmes than in 2026, while traditional reinsurers compete in the lower and middle layers. Analyst forecasts point the same way. On 9 October J.P. Morgan forecast a 10–20% decline for January and read it as stabilisation against the 12–15% fall at 1 January 2026.

The casualty (liability) book looks different. Everest added 600 million dollars to its casualty reinsurance reserves in the third quarter, after 200 million dollars in the second. The company cut casualty excess-of-loss (XoL) premium by 24.8% and property catastrophe XoL premium by 10.2%. Williamson cited social inflation in the US, meaning rising litigation and damages costs.

Europe offers a similar reading. Hannover Re subsidiary E+S Rück said in Baden-Baden on 19 October that additional capacity is sharpening competition in natural catastrophe and industrial fire lines, while cyber exposure is growing faster than capacity. The same day Howden Re examined 42 European non-life insurers. The capital-light group earned a return on equity of about 22% with 28 euros of capital per 100 euros of premium. The capital-intensive group, with 86 euros of capital, earned less than 5%.

Talay assessment

Bottom line

Rates are still falling, but the pace is easing; capital is plentiful, and reinsurers are conceding on price rather than terms. Reserve strengthening in casualty shows that ample capacity is not uniform across lines. The most likely path is a 10–20% fall in property catastrophe rates at 1 January, with greater selectivity in casualty and cyber.

Likely effects

Insurer costsPositive1–6 months
Cheaper reinsurance gives insurers room to rebuild retentions and capital plans; Howden Re puts the capital-light group's return on equity at about 22%.
Casualty reinsuranceNegative1–6 months
A 600 million dollar reserve addition and a 24.8% cut in premium signal shrinking capacity for US liability risks.
TürkiyePositiveWeeks
Ample property catastrophe capacity improves the odds that Turkish insurers renew earthquake programmes at lower prices; no Türkiye-specific broker data has been verified.

Possibilities, ranked

1
A slowing decline60%
Property catastrophe rates fall more slowly in January than in 2026, and terms are largely held.
Watch: The property catastrophe index in early-January renewal reports from Howden and Gallagher Re
2
Declines continue at 2026 pace25%
Surplus capital drags prices down as fast as it did at 1 January 2026.
Watch: An average decline above 15% in broker indices
3
A late shock halts the slide15%
A major catastrophe or capital market volatility before December flattens pricing.
Watch: Large catastrophe losses or marked market volatility in November–December

Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.

Market reaction

Indicators affected

1 Jan property cat (JPM)▼ −10–20%
Everest casualty reserve (Q3)▼ +$600mn

Bottom line

Likely effects

Possibilities, ranked

Sources