January means reinsurance time. For those unfamiliar, the bulk of the world's Property, Catastrophe and global retrocessional business is typically renewed on 1/1. This is widely considered to be the most reliable leading indicator for what insurance rates will look like in the year ahead.

1/1/26 reinsurance renewals brought generally good news for insureds. 2026 represents the sharpest decline in risk adjusted global Property insurance rates since 2014.

Buyer's Market

Property insurance remains in a 'buyer's market', characterized by competitive pricing, eased capacity, and average 10%–20% rate reductions in Property lines.

Driven by record capital and strong returns, the market saw increased competition and stabilized conditions, though some tightening remained in casualty sectors. This was specifically in the US and for more challenging sectors like construction and real estate, particularly multi family real estate where casualty claims are most challenging. Understanding commercial insurance trends can help you navigate these shifts effectively.

Renewal Details

Here are some details on 1/1/26 reinsurance renewals:

  • Property reinsurance rates fell by 10%-20% due to abundant capacity outpacing demand. The market shift focused on pricing, attachment points, and coverage.
  • Increased capacity led to accelerated market softening across many lines, driven largely by strong reinsurer returns (estimated at 17.6% ROE for 2025).
  • Dedicated reinsurance capital grew by 9% in 2025. Stronger supply dynamics and high capital levels intensified competition.
  • 2025 insured Catastrophe losses were lower than expected, approximately 18% below the five-year average.
  • Casualty renewals experienced slightly improved conditions over 2025 with generally stable capacity, though some markets are still focused on lackluster performance and long-tail loss concerns.

Market Outlook

Overall, this is mostly positive signals through at least the first half of 2026. Insurers are positioned to leverage these reinsurance conditions to restructure programs and see a continuation of rate reductions occurring in 2025 on Property insurance.

Your Business

So what does this mean for your business? Now is the time to leverage positive market conditions and restructure programs to be competitive before the next hard market hits.

It's easy to sit back in a soft market and enjoy easy, incremental rate reductions. This is exactly how so many people found themselves unprepared for rate increases in 2021-2024. Exploring alternative risk financing strategies could help you stay ahead of market cycles.

This is not the time to be complacent. Insurance will continue to be a key component and set apart the most competitive operators from the average operator.

Conclusion

If you're not utilizing a competitive insurance program to reduce OpEx and increase NOI on CRE portfolios, you will be outperformed by peers who are. This will be catastrophic as the market likely begins to harden again in 2027 and beyond.

Insurance is not the sexiest way to value engineer, but it is one of the most consistently reliable.

Take advantage of these favorable market conditions now. Review your current insurance program, restructure where possible, and position your portfolio for success before the market shifts again.