Reinsurers absorb steepest midyear property-cat rate cut in decades

Property-catastrophe reinsurance pricing fell 16% at the June and July renewals, the steepest midyear decline in decades, according to Guy Carpenter data cited by AM Best. The drop follows a 12% decline at the January 1 renewals. AM Best's new global reinsurance market segment report still finds the industry met its cost of capital for a third straight year.

The midyear fall is larger than any decline during the soft market of the 2010s, AM Best says. The agency ties the slide to reinsurers' recent profitability in property business; capacity has grown and competition pushed prices down. Median return on equity among reinsurers still came in at 16.34% in 2025, slightly below the record posted in 2023.

The cost of capital has climbed alongside: 8.63% in the first quarter of 2026, up from 8.23% in 2025 and 7.67% a year earlier. Reinsurers stayed above it, helped by underwriting profitability after years of rate increases, tighter terms and reduced risk exposure. Global insured natural-catastrophe losses again passed $100 billion, with severe convective storms above $50 billion, but programme structures kept much of the impact on primary insurers' books. Investment income adds support, and AM Best expects relatively high yields to persist for several years.

Bermuda, the major hub for property-cat reinsurance and insurance-linked securities, sits at the centre of this repricing. Rates remain almost 40% above 2017 levels, before the market's most recent hardening cycle began. The January renewals will test whether tighter terms and higher attachment points hold.