Pricing pressure is likely to continue in reinsurance after the fifth consecutive quarter of catastrophe losses below the historical average of $20 billion, analysts from JP Morgan reported.

In a new report, the US banking giant stated: “Based on our bottom-up assessment of the major catastrophe events this quarter, we estimate there are likely to be insured losses of roughly ~$15 billion, with severe convective storms (SCS) in the US accounting for the majority of the total,” the firm explained.

The Reinsurance News website reported that the bank expects pricing pressure to intensify, particularly as this year’s Atlantic hurricane season is forecast to be lighter than average due to El Niño.

Severe convective storms drove some 90 per cent of insured losses in the second quarter, JP Morgan stated. Estimated SCS-related losses were around $64 billion in 2023, over $50 billion in 2024, and approximately $49 billion in 2025.

JP Morgan noted an absence of major losses that it would consider to be reinsurance events.

“Lower catastrophe claims, even though good for the profitability of reinsurers, can also be bad news, as they will not help with declining prices and will likely lead to more pricing pressure,” the report stated.

JP Morgan added that the first half of 2026 should have been very profitable for the reinsurers.

“Therefore, as companies are likely to be well on the way to achieving their profit goals for the year, we expect that the reinsurers will seek to ‘manage’ earnings in the second half of 2026 via additions to reserve buffers and other areas that allow the build-up of prudence,” the report added.

“Reinsurance pricing in 2026 has seen a rapid pick-up in the speed of prices falling, with the January renewals showing a 12 per cent decline based on Guy Carpenter data, with this level moving to 16 per cent at the midyear renewals.

“The direction of prices tends to follow loss experience; therefore, a light 2026 for catastrophe losses is unlikely to help stop the reductions in prices seen in the market.

“The 2026 Atlantic hurricane season is forecast to be lighter than average due to El Niño. Thus, while profits are expected to be strong in 2026, at this stage there is little, in our view, to show that a floor will be found on pricing in the near term.”