In the property catastrophe reinsurance segment German reinsurer Hannover Re is anticipating that competition will intensify further if the market only experiences losses that fall largely with their natural catastrophe budgets.Commenting on the next set of reinsurance renewals at January 1 2026 in Monte Carlo at the Rendez-vous yesterday, Hannover Re explained that, “stable or slightly lower prices overall in its property and casualty reinsurance business for the treaty renewals,” is the most likely outcome.Once again, there is expected to be broad differentiation, with loss-impacted reinsurance programmes likely to see continued price rises, the reinsurer believes.Importantly, Hannover Re said that, “Terms and conditions and retentions will likely remain unchanged on a sustained adequate level.” In fact, the reinsurer remains confident enough on rate adequacy to say that it, “plans to make more reinsurance capacity available for the 1 January 2026 renewals, provided risk-adequate prices can be obtained.” “We anticipate that reinsurance prices will remain on an adequate level,” explained Sven Althoff, Executive Board member for property and casualty reinsurance.

“We are staying focused, writing only business that meets our profitability requirements.If these are not met, we are also willing to refrain from accepting business in the interests of active cycle management.On the whole, though, we continue to see good opportunities for profitable growth together with our clients.” For loss free reinsurance treaties, the expectation is that a downward trajectory in rates is likely at 1/1 2026.

However, Hannover Re believes that they should “remain on an adequate technical level.” But the reinsurer further explained that, “If loss expenditure stays within expectations over the remainder of the year, competition can be expected to further intensify – especially in business with natural catastrophe covers.“Further developments therefore depend primarily on the large loss situation in the second half of the year as well as the pace of inflation and supply dynamics.” The outlook for the January 2026 reinsurance renewals differs by region as well, Hannover Re said.In Europe, the reinsurer said, “No appreciable price reductions are expected in its own portfolio owing to the rise in extreme weather events.

Hannover Re anticipates broadly stable prices as well as terms and conditions for its business in Europe for 2026.In the case of loss-affected natural catastrophe covers, it is Hannover Re’s expectation that prices in its business will tend to move higher.” In North American property reinsurance business “early indications of rate reductions are emerging,” Hannover Re explained.Continuing to say, “Even though the year got off to a challenging start with the extensive wildfires in the Los Angeles area, sufficient reinsurance capacity remains available to service the further increase in demand for insurance protection.

“Increasing insured values continue to prove particularly challenging for regionally operating insurers, whose concentration of insured risks is especially high.Overall, though, sufficient capacity is available in the market, with the result that reinsurance programmes can normally be fully placed.Hannover Re is seeing an increasing openness to price adjustments under loss-free programmes.” The reinsurer also said that, “Stable or slightly lower prices as well as terms and conditions are anticipated in the Asia-Pacific region for 2026,” while saying on Latin America that, “Terms and conditions in insurance and reinsurance business are on an adequate level in most markets, despite slight declines recorded in the latest round of renewals in July.

Furthermore, the company is seeing a consistent increase in its lead positions on reinsurance programmes.” Back on natural catastrophe reinsurance business, Hannover Re noted that inflation continues to drive demand moderately higher, but while loss free programmes showed rate reductions the company has continued to secure price increases for those affected by loss activity.“All in all, rates remain on an appropriate level.Further price developments are dependent on the claims experience in the second half of the year – and in particular on the Atlantic hurricane season,” the reinsurer said.

Adding, “Climate change continues to drive a proliferation of extreme weather events, which in turn fuels the demand for catastrophe covers.A greater supply of reinsurance capacity will be needed globally to narrow a protection gap that has the potential to grow in the future.“Overall, assuming that prices as well as terms and conditions remain adequate, Hannover Re is prepared to strategically expand its exposure to natural catastrophe covers over time.” In North America, for catastrophe reinsurance, the reinsurer said, “Hannover Re anticipates growing demand for its reinsurance capacity and sees a sustained favourable environment for risk-adequate underwriting.” For Europe, “In the absence of any substantial losses, stable or slightly declining prices are to be expected.” Asia Pacific is more nuanced by area, but Hannover Re said it does expect some stabilisation in catastrophe reinsurance, although with differentiation depending on programme performance and region covered..

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