Design Highlights
- The January 2026 property treaty pricing cut by 14.7% is the largest decline since 2014, reverting prices to 2022 levels.
- This decline follows an 8% drop in pricing from 2025, indicating a significant downward trend in the market.
- Increased capacity and strong retained earnings among reinsurers contributed to heightened competition, driving prices down.
- Despite catastrophic events like Los Angeles wildfires, pricing momentum remained unaffected, highlighting a shift in market dynamics.
- Businesses can leverage the competitive environment for favorable renewal terms, but must remain vigilant against unforeseen risks.
As the dust settles on the January 2026 renewals, it’s clear that property treaty pricing has taken a nosedive, plummeting by a staggering 14.7%. Yes, you read that right. A whopping 14.7%. This isn’t just a minor hiccup; it’s the steepest year-on-year drop since 2014. The decline is truly remarkable, especially when compared to the 8% fall recorded in 2025.
The property retrocession pricing is feeling the pinch too, falling 16.5%, while direct and facultative rates-on-line took a hit of 17.5%. Ouch.
Property retrocession pricing has taken a hit of 16.5%, while direct and facultative rates-on-line have plunged by 17.5%. Ouch indeed.
The market has effectively rolled back to 2022 levels. That’s right. Four years of pricing history flushed down the drain. The 14.7% cut in property treaty rates means the market is now back to where it was before the last major upswing.
And let’s not forget—this all happened despite January’s record wildfire loss in Los Angeles. Apparently, the market simply shrugged it off. Pricing momentum has decisively shifted, and it caught many off guard.
In the U.S. specifically, cedents are smiling. Programme-wide decreases ranged between 10% and 20%, depending on the risk-adjusted basis. With reinsurers keen to deploy capital, it’s been a veritable buffet for those looking to renew.
The cat treaty retentions are holding steady, but that’s not the whole story. Insurers have squeezed retention during renewal, and outcomes are still sensitive to those pesky nuclear verdicts.
Capacity? Oh, it’s overflowing. Strong retained earnings, coupled with record catastrophe bond market trends, have cranked up the competition. A quiet wind season hasn’t hurt either. Reinsurers seem willing to take risks at attractive margins even with the declines. Businesses looking to protect their operations from such unforeseen events should consider how these market shifts affect their coverage options.
It’s like a free-for-all in the market, characterized by plenty of capacity and fierce competition.
But let’s not forget about the other segments. The London market is not immune either, with casualty excess-of-loss down 5-10%.
The international casualty market is experiencing its own modest softening, and the casualty ILS market saw hefty momentum in 2025. As for the ILW rates? They plummeted 10%-20% come January.
