Insured catastrophe losses came in below US$20 billion for the fifth consecutive quarter in Q2 2026, according to a JP Morgan report. The US banking group estimated total Q2 insured losses at approximately US$15 billion in a bottom-up assessment of major catastrophe events. Severe convective storms (SCS) in the United States accounted for the majority of the total.
SCS drove approximately 90% of insured losses in the second quarter, JP Morgan stated. Estimated SCS-related losses totalled approximately US$64 billion in 2023, before declining to more than US$50 billion in 2024 and around US$49 billion in 2025. SCS losses have nonetheless remained elevated relative to pre-2023 levels, JP Morgan noted.
JP Morgan noted an absence of major loss events in Q2 that would qualify as reinsurance events. The bank stated that a fifth consecutive below-average quarter would provide no support for a pricing recovery, as the market already faced accelerating rate reductions.
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"Lower catastrophe claims, even though good for the profitability of reinsurers, can also be bad news, as they will not help with declining prices and will likely lead to more pricing pressure," the report stated.
The pace of pricing declines accelerated beyond what many in the sector had anticipated at the start of the year, JP Morgan noted. "Reinsurance pricing in 2026 has seen a rapid pick-up in the speed of prices falling, with the January renewals showing a 12% decline based on Guy Carpenter data, with this level moving to 16% at the midyear renewals," the report stated. JP Morgan said pricing direction follows loss experience and that a light catastrophe year offered little prospect of reversing the trend.
The Guy Carpenter global property catastrophe rate-on-line index fell 16% at the July 2026 midyear renewal, an acceleration from the 12% at January 1. Record capital levels shifted pricing power towards cedents, with more than US$61 billion in catastrophe bond limit outstanding through the first half of 2026. Florida Citizens finalised its 2026 risk transfer programme at US$2.816 billion, with new placements roughly 30% cheaper than equivalent cover a year earlier.
JP Morgan said the first half of 2026 had likely been very profitable for reinsurers, with companies well advanced on annual profit targets. "Therefore, as companies are likely to be well on the way to achieving their profit goals for the year, we expect that the reinsurers will seek to 'manage' earnings in the second half of 2026 via additions to reserve buffers and other areas that allow the build-up of prudence," the report stated.
The bank said the 2026 Atlantic hurricane season was forecast lighter than average owing to El Niño conditions, which would offer little support to pricing. JP Morgan said pricing direction follows loss experience and that a light catastrophe year was unlikely to stop the market's declines. "While profits are expected to be strong in 2026, at this stage there is little, in our view, to show that a floor will be found on pricing in the near term," the report concluded.
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