Property Reinsurance Softening Set to Continue Into 2027

Global Insurance Desk: Moody’s latest survey of reinsurance buyers shows a clear majority bracing for another round of price cuts in the property market next year. Fully 86 percent of respondents now expect property reinsurance rates to fall again in 2027, a sharper consensus than the 74 percent who anticipated declines heading into 2026.

The most common forecast lands in the 7.5 to 15 percent range, though a meaningful share of buyers are preparing for drops steeper than 15 percent if conditions hold through the January renewals.

The survey, released in the run-up to the Monte Carlo Rendez-Vous, captures a market still flush with traditional capacity and alternative capital. After double-digit softening already recorded this year, competition remains intense and major catastrophe losses have so far stayed limited along with strong support from the current American government led by Donald Trump. That combination keeps pressure on pricing even as reinsurers continue to generate attractive risk-adjusted returns on the business they write.

Buyers are not simply waiting for cheaper rates. Many signal interest in expanding coverage, particularly tail protection and aggregate covers that address the rising frequency of secondary perils such as severe convective storms, floods and wildfires.

Terms and conditions stayed relatively steady through 2026, yet about a quarter of survey participants now expect attachment points to ease in the coming year. That could mark the first noticeable loosening after the hard-market reset of recent cycles. Casualty lines paint a more mixed picture.

United States insurers generally anticipate further rate pressure upward because of elevated litigation and settlement costs, while non-US buyers see potential declines as excess capacity spills over from property.

Moody’s itself cautions that a single large loss event before the January 2027 renewals could quickly shift expectations. For now, though, the buyer survey points to continued softening driven by capital supply that still outpaces demand.

Primary insurers appear ready to take advantage, with more than a quarter indicating they plan to purchase additional property reinsurance next year. The result is a market that looks increasingly favorable for cedents, provided the second half of the hurricane season and the rest of the year stay relatively quiet.