Moody’s Ratings expects property catastrophe reinsurance pricing to slide by roughly 15% over the next year, driven by elevated capital levels and a supply-demand balance that increasingly favors buyers of protection.
Moody’s points to a relatively calm Atlantic hurricane season in insured loss terms as part of the backdrop. Even so, it doesn’t expect demand to fade.
Primary insurers still want protection, and plenty of it, as catastrophe exposure keeps stacking up.
Global insured catastrophe losses are on track to top $100 bn in 2025, marking the sixth straight year above that threshold, a figure Swiss Re confirmed earlier.
Against that kind of loss history, Moody’s says buyers aren’t stepping back. They’re doubling down on coverage.
Pricing, though, keeps drifting lower. Moody’s expects that trend to continue, yet argues that risk-adjusted returns remain appealing for capital providers.
Not as juicy as peak hard-market levels, but still worth the effort.
“Next year, 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,” Moody’s said.
Supply tells the other half of the story. Despite heavy catastrophe losses worldwide, the reinsurance sector hasn’t seen material capital erosion. Alternative capital keeps flowing, with catastrophe bond issuance sitting at record levels.
Put those forces together and 2026 starts to look like a buyer’s market. Moody’s says that if major loss activity stays muted, rate pressure could intensify at mid-year renewals.
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.
That doesn’t mean the sector loses its appeal. Moody’s stresses that property catastrophe risk still draws interest from traditional reinsurers and insurance-linked securities investors alike. Capital isn’t fleeing. It’s just getting choosier.
The agency summed it up plainly. Expected returns remain attractive even as prices soften. Terms and conditions should stay broadly stable, although Moody’s flagged early signs of erosion. Nothing dramatic yet. But worth watching.
