Property cat pricing to drift lower at Jan renewals but still attractive for reinsurers: Moody’s Ratings

Moody’s Ratings expects reinsurance supply and demand to favour buyers at the key January 1st, 2026, renewals, with pricing for property catastrophe reinsurance likely to fall in the range of 15%, with variations by both region and peril.

After reaching highs in 2023 after the so-called reset, property catastrophe reinsurance pricing has been on the decline throughout 2025, and the expectation is for further decreases at the upcoming 1.1 renewal despite another year of more than $100 billion in insured losses from natural catastrophes.

Just yesterday, Swiss Re, one of the world’s leading reinsurance companies, pegged insured losses from nat cats at $107 billion for 2025, marking the sixth consecutive year of more than $100 billion in losses, driven by the Los Angeles wildfires and severe convective storm activity across the US.

According to Moody’s Ratings, in 2026, “demand for reinsurance is likely to remain strong as primary companies seek to reduce volatility and secure more limit to account for increased property replacement costs.”

Further, while cat losses were high globally, the rating agency notes that there’s been no evidence of capital deterioration in the reinsurance space, while alternative capital flows into catastrophe bonds are at record levels once again.

“As a result, we expect reinsurance supply and demand to favor reinsurance buyers, with pricing for property catastrophe reinsurance likely down around 15%, though there will be variations by region and peril,” says Moody’s Ratings.

Despite this, analysts at Moody’s Ratings have the same stance as numerous CEOs of large, global reinsurers, emphasising that risk-adjusted property cat returns are still attractive for reinsurers.

Back in July, reinsurance broker Guy Carpenter’s property catastrophe reinsurance rate on line indices revealed an 8.1% decline globally following the April and mid-year renewals, which followed a 6.6% decline at Jan 1 2025, a notable shift from the 29.3% increase seen in the full-year 2023.

During the so-called reset, alongside significant rate increases, reinsurers tightened terms and conditions and pushed for structural changes, notably higher attachment points to avoid frequency losses from secondary perils, a move that has been hailed as important to sustainable profitability as the stronger rate environment.

Importantly, Moody’s Ratings expects terms and conditions to remain broadly stable at 1.1, although the firm is “beginning to see some signs of erosion.”