2025 Property Catastrophe Reinsurance Prices Set to Soften with Stable Terms

Leading reinsurers predict a continued softening of property catastrophe reinsurance pricing during the year-end renewals, following a similar trend observed at mid-year. Rates for accounts without loss experience dropped between 5% and 15% at the July 1 renewals. Despite this, the increased retentions for primary insurers implemented since 2023 are expected to persist, maintaining the current risk-sharing balance between insurers and reinsurers.

Executives from major players such as SCOR Global P&C, Hannover Re, Munich Re, and Swiss Re confirm that terms and conditions remain stable, with no anticipated weakening through 2026. The property catastrophe segment may see some rate easing, but other lines of business continue to show consistent pricing and attractive profitability prospects for reinsurers.

Losses from recent catastrophic events, including the California wildfires, have led to increased rates on affected catastrophe programs, but unaffected programs experienced rate decreases. With several weeks still left in the hurricane season and sufficient reinsurance capital available, the market outlook could benefit both buyers and capacity providers if no significant losses occur.

Retention levels raised sharply in 2023 remain a key feature of the market, reflecting a strategy where primary insurers handle frequent, smaller losses while reinsurers absorb major catastrophic losses. This risk-sharing approach underpins the stability of terms and reinsurer discipline in pricing and conditions.

Demand for aggregate reinsurance coverage, which covers cumulative losses over multiple events, remains subdued. Major reinsurers express reluctance to expand aggregate offerings due to historical loss experience and challenges in frequency assessment. Aggregate programs are primarily viewed as capital protection tools rather than earnings enhancement mechanisms.

Reinsurers also emphasize the importance of reasonable retentions for both individual events and aggregate losses, particularly for insurers with diversified global operations. Aggregate coverage intended to make fundamentally unprofitable primary insurance businesses profitable faces limited appetite from reinsurers.

Overall, the property catastrophe reinsurance market continues to balance rate softening trends with disciplined underwriting, stable terms, and cautious product offerings, shaping a measured environment for market participants heading into 2026.