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Abundant capacity expected to keep property reinsurance market soft - Business Insurance Skip to content Register for free Search Search Log In Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2026 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2026 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2026 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2026 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Abundant capacity expected to keep property reinsurance market soft by Gavin Souter Agents and Brokers , P/C Pricing , Reinsurance Marsh Sep 1, 2026 Reinsurance buyers will likely see continued price reductions and broader coverage at Jan. 1 renewals if the rest of the Atlantic hurricane season is relatively benign, as reinsurers enter negotiations with ample capital and strong profitability. Marsh Re, the renamed reinsurance brokerage arm of Marsh, and Gallagher Re, a unit of Arthur J. Gallagher & Co., issued reports Tuesday indicating continued softening through 2027. Guy Carpenter formally changed its name to Marsh Re on Tuesday. North American property catastrophe business is expected to remain competitive, though cedents may use favorable conditions to seek lower attachment points and expanded coverage rather than maximize rate reductions, Marsh Re said. “If there is a quiet wind season again … there will be increased pressure, and we’ll see similar themes to what we did (at Jan. 1) 2026,” Richard Morgan, CEO of Marsh Re Bermuda and global specialties co-head of property, said during a briefing Tuesday. U.S. property pricing for loss-free risk and catastrophe business fell by as much as 20% at Jan. 1 renewals and by as much as 25% at midyear renewals, according to Fitch Ratings. Loss-hit catastrophe accounts saw declines of as much as 5% at midyear. Marsh Re said increased capacity pushed average risk-adjusted property reinsurance rate decreases into the high teens in 2026 renewals. Occurrence excess-of-loss pricing has returned to 2021 levels. Despite the competitive market, attachment points remain “meaningfully higher” than in 2021 and 2022 and coverage remains narrower than before the sharp market hardening in 2023, Mr. Morgan said. Aggregate covers have already made a significant comeback. Marsh Re said the aggregate excess-of-loss limit traded has increased by 50%, and nearly 40% of buyers now incorporate frequency protection into their excess-of-loss programs, compared with just over 25% two years ago. Capital increases Gallagher Re said global dedicated reinsurance capital increased by 5% in the first half to a record $688 billion. Traditional capital rose 4% to $541 billion, while nonlife alternative capital increased 9% to $147 billion. It expects traditional capital to increase by 6% for the full year to $549 billion, driven largely by retained earnings. Gallagher Re’s composite of large Bermudian and European reinsurers generated a 19.9% return on equity in the first half, and the broker raised its full-year ROE forecast to 16.5%–17.5%. Gallagher Re estimated that reinsurers could absorb $50 billion to $75 billion in insured losses, in addition to normal second-half catastrophe losses, and still earn their cost of equity. Losses exceeding $150 billion above normal catastrophe activity would be required to eliminate the recent buildup in capital. Laurent Rousseau, CEO of global capital and advisory and Europe and India, the Middle East and Africa at Marsh Re, characterized the current environment as a “buyer’s market.” “This is a positive environment to buy additional protection in, to position at the right point in the cycle and to support growth without sacrificing volatility management or capital adequacy,” he said. Middle East losses Geopolitical losses are creating exceptions, particularly in marine and war-related coverages. Middle East war, terrorism, and political violence losses are expected to total about $2 billion, compared with roughly $2.5 billion in annual gross premium for the global market, Mr. Morgan said. That could result in the class recording losses that exceed premium for the first time since the Sept. 11, 2001, terrorist attacks, he said. Marsh Re said pricing has tightened where Middle East losses are concentrated, but elsewhere the softening trend has generally paused rather than reversed. 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