After meeting with reinsurance industry executives in Monte Carlo at the Rendez-vous event this year, analysts at KBW have said the indicated range of expectations for property catastrophe reinsurance pricing at the January 2026 renewals is from flat to down 15%, with a desire to keep growing in the market seen as likely to drive a decline towards the higher end.At the same time, retrocessional reinsurance renewals could see rates declining even more, the analysts said, while in the insurance-linked securities (ILS) market investors and fund managers are seen as likely to roll their earnings into 2026, building the alternative capital base further.“Beyond the reasonable caveat of a few weeks remaining in Hurricane Season 2025 (although as of 7:11 pm ET on September 10, the Atlantic looks mostly calm), most (re)insurance executives expect property catastrophe excess-of-loss reinsurance rates to decline by about 10% (especially for loss-free higher layers) during the January 1, 2026 reinsurance renewals,” KBW’s analyst team explained.Continuing to say, “Individual estimates (again assuming no surprise events) of 1/1/26 property catastrophe reinsurance pricing changes ranged from “flat to down slightly” to “down 10-15%,” with most executives assuming that retrocessional reinsurance pricing would decline at a similar or slightly faster pace.” On which they conclude, “We think that the uniformly-expressed comfort with price adequacy even incorporating these decreases, and the similarly-uniform desire to (reasonably and responsibly) grow property catastrophe reinsurance premiums – even for reinsurers that want to maintain relatively low North American catastrophe market shares – point to decreases at the higher end of expressed ranges, especially if (to-date growing) retrocessional capacity allows cheaper tail protection.” Absent a significant event, pricing trends are seen as unlikely to change over the coming weeks, with a large event seen as the most likely thing that could derail the softening, as multiple smaller events may not provide a sufficient shock to the reinsurance system.

The analysts said that there remains no sign of new capital in start-up form, but that the ILS market is expected to seek to let their profits ride into 2026, which will further boost available capacity.Demand growth is expected to only be modest, with executives the KBW team met with saying mid-single digit percentages is the typically suggested range.But reinsurance companies both large and small are expressing desires to grow and in some cases an expectation that cedents will require more limit moving into 2026.

On the all-important reinsurance attachment points, the KBW team said most people in Monte Carlo do not anticipate much movement to be available for cedents there, although with some targeted exceptions.KBW explained that, “Of course, persistent (even moderate) inflation means that nominally-unchanged attachments have actually declined in real terms since the widespread and substantial 1/1/2023 increases, but reinsurers seem very comfortable with that, given the dramatic increase in the primary insurers’ share of catastrophe losses.” The analysts said that there is “clearly more willingness to write aggregate reinsurance covers” but these are also likely to be at attachment levels “considered significantly more remote than in the pre-2023 era.” All of which resonates with what we heard in our conversations at the RVS this year, with demand and still abundant capital likely to drive a further softening of catastrophe rates at the January 2026 renewals, the magnitude of which is harder to forecast at this time..All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.

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