Chris Dittman, Head of Florida Strategy at Aon’s Reinsurance Solutions, said recently that as expected, reinsurance supply continues to outpace demand ahead of the key January 1st, 2026, renewals, with the broker seeing rate decreases of between 10% and 15%.
“We’re in the throes of the 1/1 renewal for 2026, and I think it seems a bit late, we’re kind of in the first week in December here and I think from an Aon perspective, we’re kind of behind a little bit in terms of the firm-orders that are out in the market,” said Dittman. “But from what we’re seeing so far, as anticipated, the supply of reinsurance is still exceeding the demand, and we’re seeing rate levels come off between 10% and 15% at 1/1.”
As rates fall, Dittman expects cedents to buy reinsurance “a little bit more vertically,” noting that retentions were pushed higher in 2023 during the reset. “So, whether we see some buy downs or some sideways aggregates and things like that, there’s been a lot of discussion around that, it’ll be a different product, and probably different rate level, but will help the supply of reinsurance that everybody here wants to provide. And obviously the cat bond market is pretty frothy right now, so I think we’re breaking records this year.”
Dittman noted that being for Jan 1st, these decreases obviously aren’t for Florida and are on nationwide programmes for the most part. While these decrease sound significant in terms of rate, Dittman reminded the audience that 2023 was the hardest market most if not all have seen in their careers, so important to judge the decreases against the high base.
“I will say it’s interesting to me, having spent all this time in Florida, that last year we had two hurricanes make landfall in Florida, Cat 3 or larger, and we’re not talking about that,” he continued. “We did, touch wood, go through this whole year, I think we’re out of the hurricane season now, technically without any events, so that’s good. But we’re only a year removed from having two Cat 3 plus hurricanes in Florida, and nobody’s talking about that. If this were 2018 or 2019 all anybody here would be talking about is Hurricane Irma.”
Dittman was also keen to highlight the positive impact of reforms in Florida and the new legal environment.
“As we sit here and send our submissions out to the market and talk about loss costs, not having to deal with that social inflation factor that nobody can price into the business that we’re all writing is significant, and we need to do everything we can to keep that going. It really, really helps tremendously,” he said.
Expanding on the landscape in Florida in 2025 and the outlook for 2026, Justin O’Keefe, SVP, Chief Underwriting Officer, RenaissanceRe, explained that there would have been greater rate decreases at June 1st this year if it weren’t for the impacts of the California wildfires.
“So, the California wildfires affected the global reinsurance cat marketplace, created a lot of uncertainty, just with earnings and capital of the reinsurance marketplace going into June 1st, and it probably held back the level of the rate decreases that I still think, now that we’re going to really see coming into 2026,” said O’Keefe.
Adding: “We’re a reinsurer and you’re probably asking why are you talking about rate decreases and why do you have a smile on your face? I have a smile on my face because I think the risk is much more predictable today than it was three years ago, and we can bring more capital in the system with higher confidence, which means that we don’t need as high of a margin then to take that risk as we would have before the tort reforms.
“So, I fully expect going into the mostly June 1st renewals for the Florida homeowner’s marketplace, for our clients to see, I would say, material rate increases on their reinsurance, which I think is good for everyone and the sustainability of the Florida market.”
The session also featured John Seo, Co-Founder & Managing Director, Fermat Capital Management LLC, a specialist catastrophe bond and insurance-linked securities (ILS) investment manager, who said that he is seeing double the rate decreases that Chris mentioned for Florida itself.
“The cat bond market tends to be a leading indicator. If rates are going up, you’ll see it first in the cat bond market. But when rates are going down, you’ll see it first in the cat bond market, because it trades every single day. It’s a big global market, and it’s not tied to traditional insurance dates, like January 1 or June 1,” said Seo.
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