Reinsurance Increasingly a Buyer’s Market as Industry Looks Ahead to New Year

The global reinsurance market will likely see continued softening trends at the Jan. 1, 2026, renewals, but signs also indicate continued rigor on the part of reinsurers to keep attachment points and terms and conditions firm, according to recent commentary.

“The reinsurance industry is clearly and increasingly in a buyer’s market,” said Laurent Rousseau, Guy Carpenter’s CEO for EMEA and Global Capital Solutions, during a recent media briefing. Insurers’ and reinsurers’ “strategic priority” has shifted to growth, he added.

“The likeliest scenario is continued softening in the market,” Rousseau said. “We expect that price decreases will accelerate, and terms and conditions broaden, but in an orderly manner.”

The global reinsurance market remains robust, with dedicated capital rising 4.8% to $805 billion by mid-year in 2025, according to Gallagher Re. The sector’s return on equity has been strong at 12.6% despite rate softening and loss headwinds, the broker added.

Varied Property Experience

New research from Morningstar DBRS predicted the softening in the commercial property market would continue into 2026 despite natural catastrophe losses. However, the firm also anticipates a bifurcated reinsurance market that may shift the experience for downstream buyers.

“The key challenge for both insurers and reinsurers as they set out to fulfil their growth aspirations will be to maintain underwriting discipline,” said Morningstar in its report. “To achieve this goal, we expect a clear price differentiation between loss-free and loss-affected programs. For instance, insurers exposed to regions affected by recent wildfires will likely face higher attachment points, lower aggregates, and stricter wordings.”

The firm added, “Over the longer term, if worsening climate conditions continue to drive up claim costs, commercial property insurance prices may resume their upward trajectory seen in the few years prior to 2024.”

Ratings firm S&P Global anticipated a “moderate decline” in pricing for short-tail lines and potential reserve strengthening for the longer-tail U.S. casualty lines. S&P, which issued a “stable” outlook for 15 out of 19 global reinsurers, said it expected the sector to hold firm on terms and conditions.

“Despite pressure to broaden coverage and lower attachment points, underwriting discipline across the global reinsurance industry has not wavered. Reinsurers also retained their robust capitalization. These factors, combined with still-favorable market conditions and the sector’s strong investment returns, support our stable sector view,” said the firm.

From the carrier perspective, reinsurers’ commentary indicates a focus on adequacy.

“We anticipate that reinsurance prices will remain on an adequate level,” said Sven Althoff, Hannover Re executive board member for property and casualty reinsurance, in a recent commentary. “We are staying focused, writing only business that meets our profitability requirements. If these are not met, we are also willing to refrain from accepting business in the interests of active cycle management. On the whole, though, we continue to see good opportunities for profitable growth together with our clients.”

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