Gallagher Re’s April 1 renewals report found softening rates across property and specialty reinsurance lines — especially US cyber reinsurance rates, which dropped by nearly one third.

The report, entitled Rethinking the Art of the Possible, describes how ample capitalisation is driving decreases in rates, driven by a combination of strong reinsurer earnings, relatively low natural catastrophe losses in the first quarter of 2026, and a continuing influx of capital into insurance-linked securities.

Tom Wakefield, chief executive officer of Gallagher Re, said in his commentary that reinsurer balance sheets ended 2025 in robust health, “with retained earnings outpacing the supply of attractive opportunities”.

Natural catastrophe losses in the first three months of this year were approximately $18 billion — well below the ten-year average of $26 billion, Gallagher Re stated.

Alternative capital growth continues to boost reinsurance capacity, as non-life ILS assets reached $135 billion by the end of 2025 — up 19 per cent year over year.

In North America, property-catastrophe reinsurance rates fell 20 per cent year over year at April 1, “but pricing remains significantly elevated from previous lows”, the report added, while in Japan, pricing fell 16 per cent on a risk-adjusted basis.

Reinsurers continued to show strong appetite for cyber risk, the report added, noting a “surplus of capacity to meet demand”.

“Excess reinsurance capacity has led to softer pricing, particularly in non-proportional placements, with an average risk-adjusted decrease of 32 per cent,” wrote James Dominguez, senior vice-president, cyber reinsurance broker, North America at Gallagher Re. “The trend is expected to persist through 2026.”

The report also touched on the impact of the Middle East conflict on marine insurance renewals. The start of the Iran war led many insurers to issue a Notice of Cancellation for war and strikes coverage on hull, cargo, and liability policies in the Persian Gulf and Gulf of Oman.

Insurers can reinstate policies at renegotiated terms. “However, some insurers are reluctant to reinstate coverage due to concerns over accumulation, treaty event limits, or limited corporate appetite for war exposures,” wrote Nick Croxford, Gallagher Re’s head of marine, energy and aviation.

“Nevertheless, some major markets, notably London, continue to show appetite to step in and provide stand-alone war cover and facultative reinsurance, whether it be for hull and machinery, cargo or liability.”

Mr Croxford added: “Reinsurance capacity remains plentiful and there hasn’t been any bounce in pricing — reinsurers are determined not to lose their hard-earned market share, while those looking to grow continue to drive helpful competition.”

• To read the report, click here