Insurers have been told they are in a strong position to get additional support amid rising risks.

International broking group Howden released its 2026 renewal report, Re-balancing which found most areas of the market recorded price decreases at 1 January 2026 reinsurance renewals, bringing pricing back to levels last seen around four years ago, albeit with comparatively higher attachments and tighter terms.

Market performance remained strong across the value chain in 2025, with insurer and reinsurer returns exceeding costs of capital, even after the Los Angeles wildfires, one of the largest (re)insured losses on record.

Buyers benefitted from ample supply and intense competition, creating opportunities for cedents to secure broader coverage at discounted pricing.

Healthy balance sheets and retained earnings drove strong deployment appetite at the 1 January 2026 renewal, yielding accelerated risk-adjusted price decreases across most product lines. Reinsurers’ desire for growth meant supply was more than sufficient to absorb demand. Technical profits remained strong overall, supported by broadly adequate pricing levels following compounded price increases during the hard market.

It added with core programmes placed for less spend than anticipated at 1 January 2026 and with strong signings, some cedents purchased supplementary coverage to manage retentions and reduce volatility. Others plan to deploy their savings to purchase additional protection in the first six months of 2026.

Looking to the year ahead the broker added: “Conditions are expected to persist into 2026 in the absence of major macro or sector-specific events, supported by strong capitalisation and reinsurers’ continued focus on defending market share. The market nevertheless remains sensitive to losses, financial volatility and elevated costs of capital, underscoring the fragility of conditions to any acute adverse development.

“This backdrop brings opportunities across the value chain. Buyers are benefitting from rate reductions and improved terms as supply exceeds demand in most areas whilst underwriting performance remains strong, delivering healthy profits and returns on capital.”

It added: “Buyers are well positioned to secure additional protection in a period of elevated risk, heightened shock potential and favourable market conditions. For carriers, the transition rewards underwriting excellence whilst incentivising innovation to unlock new risk pools and generate incremental premium volume. Figure 2 highlights selected areas expected to outpace the broader P&C market through to 2030 due to high levels of investment and risk transfer demand.”

Another year of elevated catastrophe activity, dominated by the largest insured wildfire loss ever in Los Angeles, did little to arrest placements from completing with sizeable rate decreases and improved terms. Risk-adjusted global property-catastrophe reinsurance rates-on-line decreased by 14.7% on average. This compares with a fall of 8% in 2025 and is the largest reduction since 2014.

David Flandro, Head of Industry Analysis and Strategic Advisory, Howden Re, added: “The 1 January 2026 renewal confirms that pricing momentum has turned decisively, with risk-adjusted reductions across most major lines bringing rates back towards levels last seen around four years ago. The shift has been driven by strong retained earnings and record ILS issuance, increasing capacity and competitive tension. This is not a return to the underwriting practices of the last soft market. Attachments remain elevated by historical standards, terms and conditions are tighter; capital is being deployed selectively. The result is a market that is softening but still rational – one that continues to price volatility appropriately and create economic value for investors.”