Reinsurers cut rates by 10% to 15% on loss-free business at the 1 July 2026 Australia and New Zealand (ANZ) renewal, Howden Re said. The reductions followed similar softening in Asia and the United States at the 1 April and 1 June renewals, with cedents entering negotiations from a position of confidence built up over the year.
Buyers also bought more vertical limit during the renewal, a sign that negotiating leverage continues to shift in their favour. Howden Re said cedents arrived at the table with more confidence after watching other regional markets soften earlier in 2026.
Overseas reinsurance capacity has grown more active in the ANZ market. Howden Re pointed to diversification benefits and pricing that still generates adequate returns given the region's catastrophe risk, while motor club consolidation has also sharpened reinsurer focus on Australian business.
That diversification value sits against a market that spends heavily on protection. Total net reinsurance expense across Australian general insurers reached AU$2.46 billion in the March 2026 quarter alone, according to APRA data, a scale of spend that helps explain why overseas capital keeps flowing into the region.
Earthquake remains the largest driver of limit purchases for ANZ cedents, with its severity potential continuing to shape how most programmes are built. Flood and bushfire remain significant factors in the lower to mid layers of reinsurance towers, while hail carries material potential despite drawing less attention in renewal discussions. The 1999 Sydney hailstorm was cited as an example of a single weather event capable of producing a major catastrophe loss.
Cyclone risk, by contrast, has become less central to renewal negotiations following the launch of the Australian government's cyclone reinsurance pool, which removed residential cyclone exposure from the private market.
The pool now reinsures around 3.2 million properties across home, strata and small business segments, with annual premiums totalling about AU$653 million. Average home premiums in the highest-risk cyclone zones have fallen by as much as 39% since the scheme launched, a shift that helps explain why cyclone now carries less weight in private market negotiations than it once did.
Independent oversight has confirmed the trend. The Australian Competition and Consumer Commission's (ACCC) final mandatory monitoring report found the pool has lowered premiums in high-risk areas, though affordability pressures persist elsewhere in the market. The government opened a statutory review of the legislation underpinning the pool in September 2025 to examine whether it continues to meet its objectives.
Howden Re said the shift has altered the peril hierarchy for several cedents, with cyclone now demonstrably less material than earthquake for many buyers. Reinsurers have priced the change into their appetite, the report said, contributing to broader support for Australian programmes. Catastrophe experience across the region was relatively benign over the past 12 months.
Richard Pike, head of treaty for ANZ at Howden Re, said the renewal showed capacity remains broad. "Capacity is broad, appetite is competitive, and cedents have the leverage to improve their programmes meaningfully," he said.
Casualty renewals at 1 July were largely in line with expiring terms, with no major new trends affecting pricing or structure this cycle. One development worth watching, the report said, is a rising number of trauma claims linked to catastrophe events, although this has not yet influenced pricing.
Proportional treaties on better-performing books faced pressure for improved cession commissions, while some property programmes saw event limits increased or removed, a further structural sign of the soft market.
John Philipsz, managing director and head of Howden Re Australia, said buyers with well-constructed programmes achieved strong outcomes on price and terms during the renewal.
The 1 June renewal referenced earlier saw risk-adjusted property catastrophe pricing ease at its fastest pace of the year, driven by record levels of dedicated reinsurance capital. Howden Re's own analysis of that renewal warned that global reinsurer economic value added has narrowed through 2026, and that a further decline of similar size could push parts of the industry below its cost of capital by 2027.
Howden Re said the ANZ market enters the second half of 2026 with broad reinsurer appetite and competitively priced capacity. Rate adequacy, diversification value and a well-regulated primary market continue to support the region's appeal, even as the global softening trend shows little sign of reversing.
Andy Souter, head of APAC at Howden Re, said buyers and programmes in the region have grown more sophisticated as the softening cycle has progressed. "That is true across APAC, and ANZ is at the forefront of it," he said.
