The April 1st reinsurance renewals saw a continuation of the softening trend, with risk-adjusted property catastrophe rates-on-line returning to levels last seen in the early 2020’s, according to broker Howden Re.
The renewals were completed even as geopolitical turmoil in the Middle East “drove acute stress across multiple specialty lines globally” the reinsurance broker explained.
“Japan rates are now broadly back to early twenties levels,” explained Andy Souter, Head of Asia Pacific, Howden Re. “Strong reinsurer appetite, improving underlying performance, and a lack of major loss activity have all contributed to cedent-friendly outcomes at this renewal.”
“This renewal was completed in a largely benign property-catastrophe environment, insulated from the immediate disruption in the Gulf,” added David Flandro, Head of Industry Analysis and Strategic Advisory at Howden Re. “That said, a sustained energy supply shock raises the risk of renewed inflationary pressure and higher interest rates, dynamics that have historically affected reinsurance capital and pricing across all lines, not just those directly exposed to the conflict.”
Howden Re reports that reinsurance capital providers “maintained a disciplined approach aimed at protecting established positions in Japan,” at the April 1 2026 renewals.
The supply and demand balance remained broadly consistent, while programme structures were also largely unchanged, the broker says.
The conflict in Iran and the geopolitical and economic fallout from it did not directly affect renewals of property catastrophe reinsurance at April 1st, Howden Re went on to explain.
However, the broker stated, “Howden Re nevertheless cautions that the macro transmission channel from the Middle East crisis carries implications that extend beyond the directly impacted specialty lines, and which the broader reinsurance market must monitor as the year progresses.”
“The reinsurance market remains well capitalised and engaged,” Souter added. “Technical discipline, transparency and active monitoring are essential as we move into what is shaping up to be a more complex mid-year environment.”
More broadly across the reinsurance renewals for April 1st, Howden Re said that they were seen to be orderly, with “no structural disruption, disciplined capacity and cedent-friendly pricing outcomes”.
Looking ahead, Howden Re believes that the mid-year reinsurance renewals could see a more complex environment, with geopolitics potentially playing into them.
“Upward pricing pressure across marine, energy and political violence is anticipated as the full impact of the Hormuz crisis is absorbed, and reinsurers reassess aggregation, event definition and Middle East exposure in their specialty portfolios. For property-catastrophe lines, the direction of travel will depend heavily on loss activity in the first half of the year, and on how the macro consequences of energy pricing, inflationary pressure, interest rate trajectory and capital market volatility develop over the coming months,” the reinsurance broker explained.
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