At this year’s Monte Carlo Rendezvous de Septembre, Citizens Bank, a provider of financial and insurance insights, observed that while property catastrophe pricing is sliding, the broader reinsurance market continues to deliver solid returns.
Citizens Bank noted that the property catastrophe segment is increasingly favourable to buyers, especially if the rest of the wind season is uneventful.
Supply is outpacing demand, leading to price reductions of around 10% at recent renewals, with the potential for steeper declines of 15–20% by year-end if no major events occur.
Even so, Citizens Bank states that current pricing still supports above-target profitability, making property catastrophe one of the most rewarding lines for reinsurers. This explains why third-party capital is expanding, with 2025 earnings likely to roll into 2026.
From an investment standpoint, Citizens Bank believes reinsurers heavily concentrated in property may face investor caution, while insurers buying significant catastrophe protection are more likely to be viewed positively.
Citizens Bank also observed that reinsurers are cautiously reintroducing aggregate-style products, though in a more disciplined and selective manner than in past cycles.
While many reinsurers insisted they will maintain strict terms and conditions, brokers indicated that some are already open to aggregate-like structures, particularly for key relationships. Citizens Bank interprets this as a pragmatic shift: reinsurers are searching for growth but remain committed to ensuring returns stay attractive.
In conclusion, Citizens Bank emphasises that the market is not entering a broad soft phase. Property catastrophe pricing may continue to ease, but profitability remains strong, capital is abundant, and investor interest persists.
The upcoming renewal season is shaping up to be competitive for buyers, yet still rewarding for reinsurers with disciplined strategies.
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