Insurance-linked securities (ILS) capital is shaping reinsurance pricing in the upper-layers, but how the year-end renewals will play out depends on the rest of hurricane season, the potential for any capital to be trapped and the amount of fresh inflows, according to Mike van der Straaten, the CEO of Antares Global.Providing his reinsurance market view-point in advance of the busy January 2026 renewal season, van der Straaten believes the weight of available and deployable capital will be the deciding factor in how much softening is seen.He explained the backdrop as, “As we approach the 1.1 renewals, market conditions are stable across all major regions, with similar dynamics evident globally and in the U.S.Pricing discipline remains intact, though the pace of firming has eased as capacity continues to return.

Cedents are achieving modest improvements in terms, particularly in peak zones, while reinsurers remain selective and focused on risk quality.“Softening into 1.1.26 is expected, with risk-adjusted Rate on Line (ROLs) easing high-single to low-teens in the absence of major cat losses, yet still above long-term norms.Capacity is plentiful — both rated and alternative — supporting a more orderly and measured renewal season.

The overall balance of power is shifting gradually back toward buyers, establishing a more sustainable footing for 2026.” With the property catastrophe reinsurance market undergoing “controlled and globally consistent” moderation, van der Straaten says underwriting discipline is being maintained at this time.“The benign loss environment across most core territories has applied downward pressure on pricing, but overall levels remain resilient for now,” he stated.The pressure on pricing is not even across all layers in the catastrophe tower, with the upper-layers still experiencing the most competition.

van der Straaten said, “Competition is sharpest at risk-remote layers, where spreads are tightening most notably.Ultimate Net Loss (UNL) structures and cat bonds continue to displace Industry Loss Warranties (ILWs) at the margin, reflecting investor comfort and liquidity at higher attachment points.“While wildfire losses have marginally slowed softening, the remaining hurricane season, potential capital trapping, and fresh inflows will be key determinants of year-end trajectory.” The ILS market is seen as a key source of competition in those upper-layers, by van der Straaten.

“The influence of Insurance-Linked Securities (ILS) capital is consistent worldwide, shaping upper-layer pricing in both U.S.and international markets.Competitive ILS issuance has maintained pressure on higher-attachment points, softening rates and compressing margins in those layers,” he explained.

Adding that, “Investor appetite remains strong globally, contingent on continued benign loss activity and steady returns.A sustained low-loss year could attract further capital inflows post-1.1, prolonging competitive conditions.While momentum is healthy, maintaining it will depend on stable returns and limited market volatility.” “Strategic consolidation discussions are resurfacing globally,” in the reinsurer community, the Antares Global CEO noted.

But even with all these dynamics and a macro backdrop of persistent inflation, geopolitical instability, and elevated interest rates, alongside protectionist policies, van der Straaten noted again that the market is entering renewal negotiations with a disciplined approach to risk.He summed up, “Global reinsurance markets are aligned and disciplined heading into Baden-Baden.The benign loss year, ample capacity, and consistent ILS activity are exerting pressure on pricing, but levels remain solid and market behaviour rational.

“Expect a measured softening into 1.1.26, not a structural weakening — with reinsurers focused on maintaining underwriting discipline and differentiation as the market transitions toward equilibrium.” .All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.Our can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.