For the fourth renewal cycle running, the reinsurance market keeps getting cheaper for buyers — and this time, insurers seem genuinely unbothered by it.
Keefe, Bruyette & Woods (KBW), a US-based financial services research firm, expects property catastrophe excess-of-loss reinsurance rates to fall by at least 10% at the January 1, 2027 renewals, according to the firm's latest commentary following this year's Rendez-Vous de Septembre — an annual gathering in Monte Carlo where reinsurance executives meet to discuss market conditions ahead of the January renewal season.
The forecast comes out of conversations KBW held with 16 reinsurance companies over two days at the event. Most executives KBW spoke with expect property catastrophe rates to decline by roughly 10% or more come January — though notably, that projected drop is actually smaller than the reductions recorded at the January and June 2026 renewals, suggesting the pace of softening may finally be leveling off after several consecutive rounds of steeper cuts.
The underlying reason for the slowdown, according to KBW, comes down to how much room is left to cut. Current reinsurance pricing already contains considerably less excess margin than it once did, meaning there's simply less "cushion" left for prices to fall from without genuinely threatening rate adequacy — the minimum pricing level reinsurers need to cover expected losses and still turn a reasonable profit. Several executives told KBW that reductions of 10% or more could start pressuring that adequacy directly, potentially prompting some reinsurers to walk away from certain business entirely rather than underwrite it at unsustainable prices.
There's also a note of caution baked into the forecast. KBW pointed out that actual January 1 pricing tends to land somewhat worse for reinsurers than earlier modeling suggests — meaning the real rate declines could ultimately exceed the roughly 10% currently projected, rather than come in lighter.
The broader trend fits into a multi-year pattern of softening reinsurance prices, driven largely by abundant capital in the market chasing a supply-demand balance that's increasingly favored buyers over the past two years. Separate analysis from Fitch Ratings has pointed to a similar trajectory, projecting that policy terms and conditions — not just headline prices — will likely loosen further in 2027 too, with insurers able to negotiate higher coverage limits, broader event definitions, and extended coverage clauses as reinsurers compete more aggressively for business.
For reinsurers themselves, continued price declines mean continued pressure on underwriting margins — even if the pace of those declines is finally slowing. For insurance buyers and brokers, though, the trend represents welcome, if incremental, relief: a fourth straight cycle of falling reinsurance costs, even as global catastrophe risk shows no signs of genuinely easing.
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