During the Aon Reinsurance Solutions pre-Monte Carlo Rendez-vous briefing, senior executive Tracy Hatlestad said that the firm believes reinsurers can still achieve their ROE targets even with a further 10% or greater softening of property catastrophe rates-on-line at January 1 2026.In addition, Hatlestad, the Global Head of Property, Reinsurance Solutions at Aon, noted that at the mid-year 2025 reinsurance renewals, the amount of property catastrophe aggregate coverage limits deployed grew by an estimated 50% year-on-year, a trend she anticipates continuing in the competitive market environment as buyer friendly conditions intensify.The trend that emerged from broker briefings in advance of the annual reinsurance event in Monaco is one of softly highlighting the fact buyers are going to be hoping for even more flexibility at the end of year renewals, with prices and terms expected to soften and loosen somewhat further.But this is against the backdrop of a reinsurance and insurance-linked securities (ILS) market that, at this stage, is expected to remain disciplined.

We’ve yet to see how those tensions compete into the January renewals.Hatlestad explained the current market backdrop in property and catastrophe reinsurance, saying, “Not surprisingly, the headline for mid-year renewals, despite the California wildfires earlier in the year, reinsurers and insurance-linked securities markets were looking to deploy capacity and grow market share, and that meant that mid-year renewals experienced broadly competitive market environments.“That dynamic led to an acceleration of buyer-friendly conditions with reinsurers offering greater flexibility in terms and conditions, and options for insurers to purchase expanded coverage and new products.

“As an example of this, we saw 50% year-on-year growth in property cat aggregate limit placed, and we expect this trend to continue as reinsurers position themselves to support insurer coverage priorities.” Increased availability of aggregate and frequency coverage is one area brokers are hoping to be able to help their clients with this year, hence the trend being “expected” to continue.How much more available remains to be seen, but there are certainly some collateralized and ILS market sthat still seek to write aggregate covers and would like to do more, as long as the structure and peril definitions remain robust and don’t stretch to all-perils type approaches.Hatlestad moved on to speak about record reinsurance capital levels and highlighted the impressive growth in catastrophe bonds.

“Beyond the traditional market, the cat bond market has had an outstanding year.We’ve seen new issuance and expansion of limits outstanding by 19% totalling approximately $54 billion and I just want to put that into context,” she explained.Adding, “That’s about 10% of overall supply in the global cat market today, which is an even more meaningful share when you consider the US alone.” But, with all the capital in the industry today the expectation is that rates will come down further in property catastrophe risks, unless a major loss occurs before the end of the year.

Hatlestad explained that, “As we review the current rate environment for property cat, we see the industry is sitting approximately 20% above the global index mean rate level over the latest full market cycle.“We believe reinsurers will still be able to achieve target ROEs on their property cat portfolios with rate reductions of 10% or more going into January 1.“Supply remains ample, and there are early indications for continued desire for growth for reinsurers, and this bodes well for insurers, as we expect demand for property cat programmes to increase by about 5% again in 2026 driven primarily by growth In the US and in EMEA.” Which further serves to highlight the fact things are going to be competitive, as sector capital across traditional, cat bond and ILS market sources has risen by more than 5% this year, perhaps double that and could rise further through the coming weeks as capital raising efforts ensue..

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