While rate decreases have persisted within catastrophe exposed property reinsurance, analysts at Amwins believe they are beginning to trend toward moderation, anticipating that any continued downward movement will likely shift to between 10% to 15% as 1/1 approaches, but also noting that underwriting standards have loosened modestly.
“While competition has intensified amid abundant capacity, the market appears to be finding its footing, with signs that recent rate decreases may begin to level off as renewal season approaches,” Amwins said.
Amwins also said that, “Signs of stabilisation following a period of notable softening continue with ample capacity available across both traditional and alternative capital sources. Reinsurers are deploying larger line sizes and showing greater flexibility, particularly in high excess layers with limited CAT exposure. This has reduced the need for multiple participants to complete placements, streamlining the process for cedants and brokers alike.”
Adding: “While rate decreases have persisted, they are trending toward moderation. Following the substantial 30% to 40% reductions seen earlier in the cycle, we anticipate that any continued downward movement will likely slow to 10% to 15%, assuming no major global catastrophe events occur.”
While reinsurers also continue to compete on both price and terms, the pace of softening is anticipated to slow down as treaty renewals draw near and market discipline begins to re-establish itself.
One key factor worth noting from Amwins’ outlook for 2026 is the fact that the firm believes that underwriting standards have “loosened modestly.”
However, the firm acknowledges that reinsurers remain cautious in high hazard zones that are prone to convective storms, wildfires and flooding.
Many reinsurers are said to be employing refined underwriting models and selective deductibles to manage exposure, most notably wildfire and water damage deductibles.
The market is also currently experiencing more sophisticated valuation methods, which include transitions between replacement cost and actual cash value for roofs and other property elements.
Interestingly, as the year has progressed, Amwins emphasised that direct insurers have increasingly recognised the importance of reinsurance flexibility to support both renewal retention and growth.
“Shorter primary layers and buffer excess layers have become less common, with direct placements stretching to higher limits. This has created opportunities for reinsurers to participate in broader, more attractive layers or for cedants to adopt a “write and buy” approach, using facultative protection to manage net retentions,” the firm explained.
Furthermore, Amwins’ report also shows that property remains one of the most competitive areas heading into 2026.
Property rate reductions in 2025 commonly ranged from high single digits to more than 25%, influenced heavily by increased global capacity, larger line sizes, along with oversubscription within layered programs.
Despite the devastating Los Angeles wildfires in January 2025, which constitute the largest-ever insured wildfire loss event by far on record, as well as a heavy severe convective storm season that produced an estimated $42 billion in insured losses, overall property losses in 2025 were viewed as “very manageable” given overall carrier capitalization.
With recent catastrophe events in the U.S. causing only modest ripples in treaty structures, capacity continues to expand, and demand has held steady for now, with the market seeming well equipped to absorb losses.
However, Amwins cautions that a sudden shift, whether from tightening capacity or rising demand, could quickly magnify the financial impact of future disasters.
Amwins also noted that the London property market has seen additional new capacity, adequate margin and possible reinsurance premium relief as the industry begins to head into 2026, which is generating further softening.
In regards to Bermuda, no major shifts in appetite or line sizes are anticipated in 2026, according to Amwins.
“The Bermuda property market, similar to the market in the U.S. and Lloyd’s, continues to soften. Terms and conditions continue to ease, with attachment points and deductibles slipping slightly, and carriers offering further rate reductions. There is also an ongoing focus on profitability and long-term partnerships,” Amwins added.
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