Morgan Stanley analysts expect property & casualty reinsurance pricing to continue facing pressure heading into January 1, 2026 renewals, following a similar trend to 2025.
Despite overall pressure, reinsurers still view property-catastrophe as attractive, while casualty lines, particularly excess casualty, are seeing rate increases above loss trends.
2025 began with the California wildfires, resulting in notable catastrophe losses in Q1’25. However, Q3’25 saw very low catastrophe activity, with hurricane-related losses coming in well below expectations. Analysts noted that loss-affected accounts from catastrophes such as wildfires could see price increases heading into 1.1, partially offsetting market weakness. Given continued pricing pressure, analysts emphasised the growing importance of underwriting discipline in sustaining returns.
Reinsurer results in Q3’25 were broadly solid due to the lack of major catastrophes. Arch delivered strong underwriting performance across segments, Hamilton benefited from growth and investment gains, and RenRe progressed on its Casualty & Specialty improvement plan.
Everest executed two notable transactions: an adverse development cover providing $1.2 billion of gross limit, covering $5.4 billion of North America Insurance and Other segment reserves for accident years 2024 and prior; and the sale of renewal rights to its US, UK, European, and Asia Pacific Commercial Retail Insurance business—collectively representing roughly $2 billion of gross written premiums—to AIG.
Analysts noted that growth remains challenging, with Arch Capital, Everest, and RenRe underperforming consensus expectations amid an increasingly competitive market, pricing headwinds in short-tail and property CAT lines, and increased retention by cedants. Large account property lines, in particular, have faced significant pricing pressure. However, companies continue to see rate increases in excess of loss trends for casualty lines. While many expect 1.1 to follow a trend similar to 2025, terms and conditions are expected to remain attractive, supporting healthy returns.
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