Big reinsurers expect property rate cuts, plan to hold firm on retentions

MONTE CARLO, Monaco — Property catastrophe pricing will likely soften during year-end renewals, but terms and conditions, including higher retentions imposed since 2023, will stay in place, according to executives from the world’s largest professional reinsurers.

In addition, despite pressure from cedents, reinsurers are unlikely to expand their already limited offering of so-called aggregate coverage, which pays out for cumulative losses across multiple events, they said during presentations Sunday and Monday at the Rendez-Vous de Septembre reinsurance meeting.

Property catastrophe reinsurance rates slipped at mid-year renewals, and that trend will likely continue, said Jean-Paul Conoscente, CEO of SCOR Global P&C, a division of French reinsurer SCOR.

Rates fell 5% to 15% at July 1 renewals for accounts not hit by losses, according to Guy Carpenter & Co.

“The price adequacy of most lines of business is still good, but discipline needs to be maintained, and we expect it to be maintained,” Mr. Conoscente said.

Overall pricing remains attractive for reinsurers, said Sven Althoff, executive board member for property/casualty at Hannover Re.

“We still continue to see good opportunities to have profitable growth together with our clients, and we expect a relatively similar picture compared to what we found in 2025, so some softening, particularly on the property cat side, with mostly stable conditions in the other lines of business,” he said.

Catastrophe programs hit by losses from the California wildfires earlier this year have already seen increases, but programs not hit by losses saw rate reductions, Mr. Althoff said.

With several weeks of the hurricane season left, it’s hard to predict year-end rates, but it could potentially be a favorable environment for reinsurance buyers and sellers, said Steffan Golling, a member of Munich Re’s board of management who is responsible for global clients and North America.

“The exposures are growing; there is sufficient capital available; if everything else stays uneventful, I’m pretty sure there will be a good outcome for both for buyers as well as for capacity providers,” he said.

Retention levels will likely hold, the executives said. Reinsurers sharply increased primary insurers’ retention levels in 2023.

“The risk-sharing between insurance companies and reinsurance companies is about what you would expect, where the insurance companies focus on the attritional losses and the reinsurers focus on the really big events as a shock absorber,” said Urs Baertschi, CEO property/casualty reinsurance at Swiss Re.

The balance is unlikely to change this year, he said.

“On the reinsurance side, we have not seen any weakening of terms and conditions during 2025 and we also see no reason whatsoever for 2026 to have a different picture,” Mr. Althoff said.

Cedents and reinsurance brokers are seeking more aggregate programs, which have been limited over the past several years because of losses from multiple severe convective storms and hurricanes. But all the major reinsurers said they probably won’t expand their frequency offerings.

“We don’t mind aggregate covers if they are very much in the tail of the distribution curve, so they’re for capital protection. Very often, this is not the case, and it’s more earnings protection. Given climate change, it’s difficult to assess the frequency side,” Mr. Althoff said.

Aggregate covers that have a “reasonable” retention on an individual event and aggregate basis can offer protection for insurers with a global business spread, Mr. Golling said.

“If it’s for the purpose … of trying to make an unprofitable primary insurance business into a profitable one, then presumably you will not find many reinsurers still having an appetite for this, and certainly not Munich Re,” he said.