Property reinsurance market softens further, broker reports
A new report by reinsurance broker Guy Carpenter highlights persistently softening conditions in the traditional property market.
The report on July renewals said the global property catastrophe rate-on-line index, a key pricing metric, was down by 16 per cent.
Guy Carpenter pointed to abundant capacity driving the rate decrease, with overall dedicated reinsurance capital having reached an estimated all-time high of $663 billion in 2025 — an increase of 9 per cent — while alternative capital has grown 15 per cent since 2024.
Dean Klisura, chief executive officer of Guy Carpenter, was quoted as saying: “In the current market conditions, cedants have secured competitive pricing and terms on their reinsurance programmes, but many are also exploring alternative options, such as parametric solutions and sidecars, as ways to complement their traditional protection.
“We expect this trend to continue as we move through the remainder of the year.”
The catastrophe bond market reached record-breaking levels in the first half of 2026, with total outstanding notional capacity surpassing $61 billion.
After a record 2025, the first half of 2026 featured 60 deals closing, totalling $15.8 billion in limit. The growth represented sustained sponsor demand and robust institutional investor appetite.
The market is seeing a major push towards innovative and alternative risk transfer structures, the report said.
The parametric expansion has solutions moving beyond traditional wind and earthquake risks into secondary perils such as flood, wildfire and severe convective storms, where protection gaps are growing.
There has been a notable surge in casualty sidecar activity, particularly for wholesale managing general agent-sponsored vehicles, as investors seek to accumulate assets under management in property and casualty risks.
The report states: “Casualty midyear renewals continue to demonstrate nuanced outcomes, reflecting adequate capacity and differentiated pricing based on loss experience.
“Alternative capital growth offers diversification opportunity for cedants, with increased utilisation of catastrophe bonds and parametric in property lines, sidecars and legacy solutions in casualty.”
Guy Carpenter said it had responded to geopolitical conflict by developing new specialty quota share products and a consortium, “offering meaningful capacity where it was previously unavailable”.
The report also highlights how the total loss reserve for the 2024 Baltimore Bridge collapse has increased from $1.5 billion to $2.8 billion, which is expected to be largely borne by the marine reinsurance and retrocession markets, impacting 2027 renewals.
• For more on the Guy Carpenter report, see Related Media
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