The January 1st 2026 reinsurance renewals saw “accelerated softening” as excess capital in the market weighed on rates, while property catastrophe renewals saw double-digit declines with investor appetite for insurance-linked securities a contributing factor, according to broker Guy Carpenter.Guy Carpenter is the first of the major reinsurance brokers to comment on the outcome of the January 2026 1/1 reinsurance renewal season and in its analysis highlights excess levels of capital in the sector.Expanded reinsurance capital drove “accelerated softening” the broker explained, with rate decreases achieved across many lines of business for ceding clients.Guy Carpenter estimates that reinsurer returns-on-equity are around 17% for 2025, helping to drive dedicated reinsurance capital 9% higher by the end of the year.

While insured catastrophe losses are estimated at $121 billion for the year, some 18% below the five-year inflation-adjusted average.But Guy Carpenter highlights that even with a relatively high year of losses such as this, it was the reduced share of the insured loss burden that reinsurance capital experienced which has helped to raise sector capital levels even higher.The broker estimates that reinsurer’s share of industry losses was only 11% in 2025, compared to the 20% the reinsurance market might have taken prior to the market shift and installation of higher attachment levels and stricter terms in 2023.

“Excess capital positions, profitable underwriting results, and property reinsurance rates all drove reinsurers’ appetite for growth,” Guy Carpenter explained.Property catastrophe reinsurance placement for the January 2026 renewals saw protection buyers benefiting from double-digit risk-adjusted rate reductions in loss-free programs.Reinsurance buyers also pushed for improved terms on risk-sharing, the broker said, through aggregate covers and catastrophe quota shares.

The insurance-linked securities (ILS) market experienced strong investor appetite which has contributed to the softer property market conditions, Guy Carpenter added.The broker also noted surpassing $58 billion by its figures, while 15 new sponsors entered the market in 2025 (our chart shows 14 sponsors currently, as one deal from a cat bond market entrant settles this week).Dean Klisura, President and CEO, Guy Carpenter, commented, “Despite global trade tensions and increased regulatory scrutiny, reinsurers have grown capital due largely to strong retained earnings.

This has allowed clients to benefit from lower prices and a wider range of innovative solutions to meet their rapidly evolving needs.” Casualty reinsurance renewals at 1/1 2026 saw more nuanced outcomes, dependent on program, performance, structure etc.Guy Carpenter also noted increased reinsurance sidecar activity again, as these structures become increasingly prevalent in the market as a way for third-party investor capital to support reinsurance programs.In particular, the expansion of sidecars to support longer-tailed portfolios was again seen at this renewal season.

Overall, Guy Carpenter said that “reinsurance in all forms is being utilized by cedents as a strategic growth tool”, as cedents use of risk capital becomes increasingly sophisticated.Read all of our ..All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.

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