Reinsurance renewals are on course for further softening at January 2027, with Moody's Ratings maintaining a stable outlook for the global sector despite property catastrophe prices falling more than 20% in the 18 months since 2024.
Speaking during a media briefing ahead of the Rendez-Vous de Septembre in Monte Carlo, Moody's analysts said reinsurers are expected to hold the line on attachment points and terms even as primary insurers push for better conditions.
For brokers heading into January negotiations, that means falling prices will only tell part of the story; the real contest this renewal season is over what reinsurers are willing to give back on terms, not just price.
Benjamin Serra, senior vice president in Moody's European insurance team, based in Paris, said the softening reflects reinsurers' financial strength rather than any loosening of underwriting standards. Reinsurers continue to "maintain underwriting discipline despite more pressure from ceding companies and despite the softening of the pricing cycle," he said.
The pricing direction is also reflected in Marsh Re's live tracking of global reinsurance renewal pricing. The broker, formerly known as Guy Carpenter, has recorded double-digit declines in its property catastrophe rate index through 2026.
Antonello Aquino, managing director and global co-head of insurance at Moody's Ratings, based in London, said the findings draw on Moody's survey of 40 primary insurers carried out over the past two months. On the property side, a growing share of respondents expect price declines at the January 2027 renewal compared with last year's survey, a trend Serra said does not extend to casualty, where views are more mixed.
Serra said the discipline reinsurers showed after raising attachment points, the loss level from which cover begins to pay, in 2023 has largely held.
"For example, in the last three years, the level of cat losses was very high, but because of the increase in attachment points which occurred in '23, most of these losses were actually retained by primary insurance companies and were not ceded to reinsurance companies," he said.
That retention, he added, helps explain why reinsurers have posted strong results despite a run of high industry loss years, a trend explored further in recent coverage of reinsurers' near-record half-year returns. Notably, Serra said it was mostly larger primary insurers that managed to secure better terms in recent renewals, giving well-resourced clients more leverage to push for movement in January while smaller insurers saw attachment points hold or even rise.
That negotiating dynamic is being tested by a new class of risk. Moody's identified data centres as a growing accumulation challenge that is already shaping how capacity gets placed, an exposure first examined in an earlier Moody's briefing on AI liability and data centre risk.
Jesse Nickerson, head of research for casualty and financial lines, said the sector represents "around $3 trillion of investment" over what he described as roughly a five-year window, driven largely by AI infrastructure demand, and noted that major brokers have already launched dedicated data-centre marketplaces and centres of excellence to handle the placement side of that opportunity. The scale is hard to model conventionally.
"They require different techniques for modeling them on the property side, whether that be grids of points, campus coding approaches," Nickerson said. "The 100-megawatt installations use as much electricity as 100,000 homes."
Brandan Holmes, senior vice president in Moody's EMEA insurance team, based in London, questioned whether full-value cover even makes sense at this scale: "For a hyperscaler, $20 billion facility, do you really need to provide insurance limit for the whole thing?"
For brokers, that's an open placement question as much as a modelling one. Aquino said insurers have been cautious about underwriting the risk not for lack of capital but because of concentration, leaving some data centres struggling to secure cover at all. The UK has already treated the exposure as strategically significant, designating data centres as critical national infrastructure in 2024.
Alternative capital offers brokers another lever, but not necessarily an easier one. Holmes said insurance-linked securities (ILS) capacity has "grown significantly," citing outstanding volume of "$145 billion" on Aon's estimates – an increase of more than $50 billion in under five years.
Moody's also rated a German flood catastrophe bond, a type of insurance-linked security that transfers catastrophe risk to capital markets investors, this year under its revised methodology: Gothaer's Yardstick Re transaction received an investment-grade Baa2 rating and priced below 200 basis points, comparable with traditional reinsurance pricing.
Even so, growing capital hasn't closed the gaps left as reinsurers moved away from frequency losses. Moody's buyer survey found more than half of primary insurers expect aggregate covers, which pool frequency losses across a portfolio, to become more available at the January 2027 renewal, which could give brokers more scope to place secondary-peril cover such as convective storms.
For brokers, then, the softer cycle comes with real limits attached. Capacity is abundant and headline prices are falling, but reinsurers are showing little appetite to give up the attachment points and terms secured in 2023, and emerging concentrations like data centres mean the placement conversations this renewal season will be as much about structure as about price.
