In a recent report released by Goldman Sachs, analysts convey a distinct skepticism regarding the rational behaviour of the property catastrophe reinsurance market, emphasising that the structural conditions have not altered and that signs of undisciplined competition continue to exist, even in the absence of more favourable market dynamics.Fundamentally, analysts note that the barriers to entry have not increased, while also pinpointing that there has not been a favourable structural shift in property cat supply/demand factors.Additionally, Goldman Sachs asserts that property reinsurers are “actively participating in the race” to the bottom in primary property cat through managing general agents (MGAs), while commentary from various brokers has begun to emerge regarding terms eroding and aggregate structures returning.“New sources of reinsurance capacity, such as AIG/Blackstone (launched 2025) and Ryan Re (launched 2019), the persistent supply of alternative capital, and no exits from meaningful traditional capacity, don’t support a view that fundamental market dynamics have become more favourable,” Goldman Sachs noted.

Adding: “If the fundamental market dynamics have not become more favourable, then we must believe that the entire group of market participants will act more rationally under the same market forces.” The financial services company continues: “Beyond seeming highly optimistic without evidence, we believe there is evidence to the contrary, as we look at reinsurer behavior in the primary E&S property market and broker commentary.” Concurrently, analysts also outlined that a large portion of carriers have highlighted “aggressive” reinsurer-backed MGA behaviour within the primary property catastrophe space.The firm particularly highlighted recent comments made by Arch Capital Group that suggested that during 2024/2025, reinsurer-backed MGAs rapidly brough back the large-limit capacity that created the dislocation within the property cat market in 2023.“In addition, while reinsurers broadly have defended the outlook on terms and conditions, leading reinsurance broker Aon highlighted that reinsurers offered greater flexibility on terms and conditions on top of stronger pricing during the mid-year renewal,” Goldman Sachs added.

In a separate report, analysts at Citizens Bank acknowledged that supply in the property cat market is outpacing demand, adding that if this year’s hurricane season remains calm, that imbalance is likely to grow.“Consensus among the meetings we had last month in Monte Carlo was that the starting point is the down ~10% range we have seen at recent renewals, with it likely taking a very sizable event to bring pricing back toward flat, with potential for rate declines to accelerate toward down 15%-20% (higher end for retro) if wind season remains calm and there are no other major events before year-end,” Citizens Bank said.Adding: “All that said, we do not believe the situation is dire for reinsurers as absolute pricing levels in property cat remain robust and supportive of above-target returns.

In many cases, property cat remains the highest return business in a portfolio, hence why it is attracting capital at a faster pace than demand is growing.” Lastly, Citizens Bank affirms that although there are no indications of new start-up reinsurers, the influx of third-party capital continues to increase and is expected to carry over the profits from 2025 into 2026.As catastrophe bond spreads at issuance decline in , the cat bond market has been setting out a relatively aggressive pricing stall which is almost certain to drive a response from the traditional reinsurance market in the run up to the end of year renewals.Absent major losses, or some other capital impairment event, the reinsurance market looks set to enter 2026 with heightened competition and potentially meaningfully lower pricing at some return-periods of the property catastrophe risk tower.

How rational the market is will depend on capital levels, to a degree, but discipline may also be tested, including on terms and attachments if current trends continue..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.