Analysts from Autonomous suggest that while reinsurance terms and conditions are set to face increasing pressure as 2026 progresses, any slippage seen in 2025 does not yet indicate that T&Cs are becoming irrational.
On terms and conditions, Autonomous also highlighted discussions throughout 2025 regarding slippage, with several high-profile aggregate contracts reinstated.
“Broker commentary again appears consistent in noting that reinsurers have been defending T&Cs more robustly, while cedents generally have been content banking the price saving,” analysts added.
“Currently, though this is largely anecdotal, and we will track developments where possible though the year.
“We do note that the brokers collectively warn that T&Cs will be under greater pressure as 2026 progresses, with reinsurance pricing now at a more balanced level, brokers and cedents likely to press for greater coverage against earnings volatility.”
Additionally, Autonomous outlined that a key feature of the January renewals was the value of data, both from the primary ceding insurers, and also the reinsurers.
In both property and casualty markets, analysts explained that broker commentary suggested coverage could be expanded, or pricing lowered, if cedents could demonstrate the value proposition of the treaty through data and experience.
“Reinsurers appear more resistant to those clients that could not offer such visibility. Again, currently this is largely anecdotal and likely forms part of the discussions with management teams in the months ahead,” Autonomous observed.
Further into the report, Autonomous suggested there are grounds for optimism that the current reinsurance cycle is a “little more rational” than those that came before.
The firm clarified that the reinsurance cycle is frequently influenced by basic supply-and-demand factors, which usually trigger swift price hikes following significant catastrophic events, followed by later reductions.
The previous cycle, in contrast, was remarkably distinct, with pricing momentum commencing at the 2018 renewals after the exceptionally active hurricane season of 2017 and progressively increasing until it peaked in 2023–24.
“While there is still some reasons for optimism that this cycle is a little more rational, after a year of very limited loss outcomes across the reinsurance space, there is significantly more capacity in the industry. With the primary insurance industry also facing pricing pressures — particularly much of the global commercial market — there is more focus on reinsurance expenditure as a margin maintenance tool,” Autonomous said.
After two years of softening, the state of the reinsurance market appears to now share several similarities with the last soft cycle in 2014.
“At the 2025 January renewals, global catastrophe pricing fell by the higher end of mid-single digits, which was better than the picture we’d seen in the initial onset of soft cycles previously. Fast-forward one year and the industry is now catching up with the historical norm,” Autonomous explained.
Concluding: “From that better picture in January 2025, this January, in contrast, shows the largest Year 2 price decline of a softening market, albeit the picture is now broadly consistent with the market pricing dynamic of the 2014 as well as the 2007 cycles.”
In the catastrophe bond and insurance-linked securities (ILS) market, while there has been an expansion of coverage terms in some deals we’ve seen again it does not appear irrational at this time, with investors demanding compensation for broader coverage and frequency risk focused deals.
At the same time, pricing in general appears to have roughly bottomed out at this time, as evidenced by more catastrophe bonds pricing within their initial guidance so far in 2026.
