J.P. Morgan says the European P&C insurance market is heading into a different phase, one shaped by falling property catastrophe reinsurance prices and fading pricing momentum across major lines.
The bank frames the next stretch as less supportive for revenue growth than insurers have enjoyed in recent years.
After a long run of strong rate increases, pricing is no longer doing the heavy lifting. J.P. Morgan expects most P&C insurers and reinsurers to operate in a slower top-line environment through 2026. Growth won’t disappear, but it won’t come easily either.
Some firms may lean on reserve strength built up during the hard market. That cushion helps, maybe more than management teams admit. Even so, J.P. Morgan says further margin expansion looks difficult once pricing stops cooperating.
Property catastrophe reinsurance sits at the centre of the shift. The bank expects rates in that segment to fall meaningfully in 2026, with declines of around 10-12% seen as realistic.
Capital remains plentiful, and losses from the 2025 Atlantic hurricane season came in lighter than feared.
Terms and structure still matter. J.P. Morgan notes that disciplined wording, firm conditions, and stable attachment points should soften the blow, helping reinsurers defend underlying profitability even as headline prices slide.
Commercial insurance tells a similar story. After more than five years of steady increases, the market has clearly turned.
J.P. Morgan points to indices such as Marsh, which show several quarters of small global price declines. For 2026, the bank expects mid-single-digit reductions, driven mainly by property business.
The US market, still the anchor for global commercial insurance, shows the same direction of travel. Pricing pressure there mirrors what is unfolding in Europe, reinforcing the view that this is a cycle shift rather than a regional blip.
Specialty lines are adjusting too. Lloyd’s carriers have already reported moderate price decreases, though results vary by class. Cyber remains a standout. Prices keep moving lower despite an active claims environment.
For 2026, J.P. Morgan expects US cyber pricing to settle closer to current loss experience. Across Specialty more broadly, the bank anticipates a gentle softening that looks a lot like 2025, nothing dramatic, but enough to change the mood inside underwriting rooms.
