Year-End Reinsurance Renewals Show Dynamic Market Changes

January 1 Renewals: A Softer Property Market, a Selective Casualty Market, and a Lot of Capital Looking for a Home

If the January 1 renewals felt a little like two different markets running side by side, you were not imagining it.

On one track, property catastrophe reinsurance pricing moved meaningfully lower, with risk adjusted reductions commonly landing in the 10% to 20% range for many non loss impacted programs. (ReinsuranceNe.ws) On the other, casualty renewals were far steadier, with outcomes more closely tied to each cedent’s portfolio actions and underwriting discipline than to broad market momentum. (Business Insurance)

The connective tissue between both tracks is capital, and right now there is plenty of it.

“When supply outpaces demand, pricing naturally decreases.”
Brian Flasinski, North American CEO, Gallagher Re (ReinsuranceNe.ws)

The Big Story Behind the Price Moves: Abundant Capacity

Reinsurance buyers entered the season with fresh memories of tighter conditions and tougher conversations in 2023 and parts of 2024. But by late 2025, multiple signals were pointing in the same direction: supply was building faster than demand.

Aon reported global reinsurer capital reaching $760 billion by the end of the third quarter of 2025, supported by retained earnings and additional inflows, including alternative sources. (ReinsuranceNe.ws) And third party capital climbed to $124 billion, up $9 billion versus the prior year. (ReinsuranceNe.ws)

One visible expression of that appetite is the catastrophe bond market, which posted another banner year with more than $24 billion issued across 74 sponsors. (ReinsuranceNe.ws)

All of that capital does what capital does: it looks for risk that pencils, and it competes. When it competes, price pressure follows.

Why Property Fell Faster Than Many Expected

The property story is not just “more capital.” It is “more capital, plus better than feared loss experience, plus buyers pushing for down pricing.”

As the North American wind season progressed with limited losses, market participants gained confidence that reinsurers would finish the year in a strong position, which in turn changed the negotiating temperature heading into January 1. (Business Insurance)

Guy Carpenter’s read on the market landed in the same neighborhood, reporting a 12% decline in its Global Property Catastrophe Rate on Line Index at the January 1, 2026 renewals, with outcomes varying by region, layer, and loss experience. (ReinsuranceNe.ws)

“It became clear that reinsurers were going to have a very good year on the property side… and it became clear to clients that the market was going to be softer.”
Mike Van Slooten, Head of Market Analysis, Aon Reinsurance Solutions (Business Insurance)

A quick snapshot of the numbers

Casualty Stayed Flat, but Not Simple

Casualty treaty renewals did not follow property’s downward slope. That is partly because casualty capital is more sensitive to uncertainty, and the uncertainty is still there.

U.S. casualty remains under the microscope due to litigation trends and loss development pressures, with auto and general liability continuing to be especially challenging to model and price. (Business Insurance) The result is a market that looks stable on the surface but is highly differentiated deal to deal.

In practice, that means cedents who can tell a clear story about underwriting changes, claims strategy, attachment points, and portfolio remediation tend to see better outcomes than those still working through adverse development and volatility.

Alternative Capital Is Not Just a Property Story Anymore

For years, alternative capital was most commonly discussed in the context of property catastrophe. That is still the center of gravity, but the conversation is widening.

Sidecars and other structures are getting renewed attention as investors look for ways to participate in insurance risk with targeted terms and transparent performance drivers. (ReinsuranceNe.ws) And even where traditional capacity remains the backbone, more placements now involve some blend of balance sheet capital and capital markets participation.

The practical takeaway for insurers and reinsurers is that capital structure is becoming a strategic lever, not just a market backdrop.

The One Bullet Point Section: What This Means for Insurance Leaders Right Now

• Expect continued segmentation: property outcomes will vary sharply by loss experience, layer, and exposure management, while casualty differentiation will hinge on underwriting actions and loss trend credibility. (ReinsuranceNe.ws)

• Use the capital abundance wisely: with global capital elevated and third party participation strong, program design and data quality can be the difference between simply getting a lower price and getting a better risk transfer. (ReinsuranceNe.ws)

• Plan for strategic knock on effects: excess capacity and softening pricing can raise the odds of consolidation pressure, especially for smaller players competing for the same business. (Royal Gazette)

Looking Into 2026: Less About “The Market” and More About “Your Market”

The most useful lens on these renewals is not a single headline about prices up or down. It is the reinsurance market’s growing tendency to price the individual story, then use abundant capacity to compete for the stories it likes best.

Property buyers will likely keep pushing for improvements while the capital stack stays tall. Casualty buyers will keep encountering scrutiny, but also opportunity, particularly where remediation is real and well evidenced.

And across both, the quiet theme is that reinsurance is no longer just an industry balance sheet conversation. It is increasingly a capital markets conversation too, and that is reshaping how risk gets priced, packaged, and placed.