Insured losses from catastrophes were the lowest for eight years in the first half of 2026, according to a report by Gallagher Re.

The broker found that insurers covered at least $46 billion of catastrophe losses during the first six months, 28 per cent below the ten-year average of $64 billion.

The report noted it was the first time since 2020 that the first half did not see a single catastrophe generating more than $5 billion in insured losses. It was also the fifth consecutive quarter without an industry loss exceeding $10 billion.

While a run of lower-than-average catastrophe activity means lower claims for many reinsurers, it also drives reinsurance prices lower, continuing the industry's softening market — with repercussions for the profitability of Bermuda’s flagship industry.

Gallagher Re said total economic losses reached at least $142 billion, about 10 per cent below the decade average, highlighting the continuing gap between the overall cost of disasters and the amount insured.

The broker said the relatively benign claims environment had left insurers and reinsurers with robust catastrophe budgets and strong balance sheets.

That, combined with abundant capital flowing into the sector, is reinforcing competitive pressure at the July renewals and setting the stage for further declines in reinsurance pricing.

“With the prospect of a less active Atlantic hurricane season, and the potential for lower industry losses for the rest of the calendar year due to a strengthening El Niño, this could set the stage for another series of upcoming reinsurance renewals taking place under soft market conditions,” the report said.

Gallagher Re said abundant underwriting capacity, strong reinsurer earnings and below-average catastrophe losses had already continued to push property catastrophe reinsurance prices lower, while capital growth was still outpacing premium growth.

The first half of 2026 continues a trend that has emerged since the industry's hard market began easing.

Since 2022, only five catastrophe events have generated insured losses above $10 billion: Hurricane Ian in 2022, Hurricanes Helene and Milton in 2024, and the Palisades and Eaton wildfires in 2025.

That compares with 13 such events between 2017 and 2021, a period that included repeated large catastrophe losses which helped trigger years of sharp reinsurance price increases.

The report cautioned, however, that the industry’s favourable experience should not be mistaken for a reduction in underlying risk.

While headline losses have been lower, so-called secondary perils — particularly severe convective storms and flooding — continue to generate frequent and costly claims.

There were at least 30 separate billion-dollar catastrophe events globally during the first half of the year, including severe winter storms in North America, European windstorm-driven flooding, US thunderstorms and a devastating earthquake sequence in Venezuela.

When weather-related events alone are considered, excluding earthquakes and other geophysical disasters, economic losses totalled at least $104 billion, with insurers paying at least $44 billion.

June marked the official arrival of El Niño, with global forecasting models suggesting it could become one of the strongest such events on record by the end of the year. Strong El Niño conditions typically suppress Atlantic hurricane activity while increasing storm activity in the Pacific.

The combination of a quieter Atlantic outlook, strong industry capitalisation and restrained catastrophe losses leaves reinsurers entering the second half of the year from a position of considerable financial strength.

However, Gallagher Re warned that catastrophe volatility can quickly return and that one or two major events during the remainder of the hurricane season could rapidly alter the year’s loss picture.