Global property-catastrophe reinsurance prices fell 16% year-on-year at the June and July renewals, the steepest annual decline in 25 years, as record capital levels put pressure on a market central to Bermuda's insurance-linked securities sector, where reinsurers represent about 36% of the global market by premiums, according to the Association of Bermuda Insurers and Reinsurers.
Guy Carpenter, the reinsurance broker owned by Marsh McLennan, said its Global Property Catastrophe Rate-on-Line Index declined from 12% at the Jan. 1, 2026 renewals to 16% following the mid-year renewals. In its July renewals report, the broker said, "In some cases, risk-adjusted decreases have deepened since January 1, 2026 renewals, and property catastrophe rate on line (ROL) remains down globally, around 16%."
The 16% decline is the largest annual drop since the late 1990s and steeper than any year during the soft reinsurance market of the 2010s, according to Guy Carpenter's index, as reported by Artemis.bm. The broker said benign catastrophe losses, abundant reinsurer capacity and growing risk appetite continued to drive a competitive pricing environment.
Rival broker Gallagher Re, in a separate report, estimated insurers incurred at least US$46 billion in catastrophe losses during the first six months of 2026, about 28% below the 10-year average of US$64 billion, marking the fifth consecutive quarter without an individual industry loss exceeding US$10 billion. Guy Carpenter said Florida property catastrophe reinsurance rates fell 15% to 20% at the June 1 renewals.
The pricing pressure is already visible in carrier earnings. Bermuda-based RenaissanceRe reported second-quarter 2026 net income of US$654.2 million, down 21% from a year earlier, while gross premiums written declined 12.5% to US$2.99 billion. Chief executive Kevin O'Donnell said strong underwriting performance "anchored" results as the combined ratio improved to 72.8%, helped by low catastrophe losses and favorable prior-year reserve development.
Lower property catastrophe reinsurance pricing reduced Guy Carpenter's underlying revenue growth by about six percentage points during the second quarter, according to Marsh McLennan. Property catastrophe business represents roughly half of Guy Carpenter's global portfolio, president and CEO Dean Klisura said, leaving the broker particularly exposed to the softer pricing environment.
Despite the soft market, alternative capital remained active. More than US$61 billion of catastrophe-bond limit was outstanding at the end of the first half of the year. Guy Carpenter led 20 cat-bond issuances providing $5 billion of coverage during the period, a company record, and reported double-digit growth in structured transactions and sidecars.
Softening extended beyond property catastrophe lines. Global commercial insurance rates fell 6%, led by a 12% decline in property rates, while financial and professional liability fell 3% and cyber declined 4%. Casualty was the exception, rising 2% globally, with rates for US excess casualty increasing 15% amid higher claims costs.
