Competition abounds, at least for now

Shared and layered programs are especially competitive, with many buyers seeing rate reductions of 15% or more at renewal. Competition also exists in the single-carrier space; many carriers continue to view this segment as fundamental to growth opportunities.

Reinsurance buyers are seeing broad pricing reductions of 15% to 20% year over year. Still, reinsurers are maintaining underwriting discipline, particularly around aggregate covers and quota share structures, which remain under scrutiny due to past performance and softening primary rates.

Reinsurers are generally accepting current attachment points while expressing concern about weakening terms and conditions. Capital inflows — especially from insurance-linked securities and catastrophe bond markets — continue to reinforce supply levels.

While overall conditions are favorable, some carriers have been holding rates steady for certain buyers, refusing to lower rates as much as their competitors. This suggests that, at least for some insurers, we may be approaching a rate adequacy threshold.

For insurers, risk and data quality remain important. Buyers are able to differentiate themselves by delivering high-quality exposure data for catastrophe modeling. Loss-free accounts are also seeing more favorable conditions.

Although no segments of the market are seeing significantly different conditions from the norm, insurers are applying more intense underwriting scrutiny in pockets, including wood frame construction, warehousing, and food and beverage operations. Carriers are keeping an eye on supply chain risks, including potential accumulation risks.

Despite a calm Atlantic hurricane season, global insured catastrophe losses again topped $100 billion in 2025, according to the Swiss Re Institute, driven by severe convective storms15 and record losses from the California wildfires. Catastrophe activity in the first quarter was relatively normal, and forecasters expect below-average Atlantic hurricane activity this season. But it remains to be seen whether that prediction is accurate. Reinsurers appear willing to accept further property pricing softening through midyear renewals but may reassess if margins compress further or if a significant catastrophe event alters the supply-demand balance.

Valuation inadequacy remains an underappreciated risk. Construction costs have risen substantially over the past several years, and tariffs on imported building materials such as steel, aluminum, lumber, and finished components are adding further upward pressure on replacement values. Worse, inflation costs seem to be climbing further due to tariff-related disruptions.

In the event of a total or near-total loss, the gap between insured value and actual replacement cost can be material, and coinsurance provisions in some policies mean that underinsurance can affect partial loss recoveries as well.