Reinsurance capital sits near record levels, H1 2026 insured catastrophe losses were the lowest since 2020, and the market is signalling 10-15 percent property-cat declines for January 2027. Latin America has already seen 15-20 percent reductions at 1 July.
Capital at records, losses below trend
Gallagher Re’s H1 2026 market report puts dedicated reinsurance capital at nearly $688 billion, an all-time high and up 5 percent in six months, with non-life alternative capital close to $147 billion. Composite return on equity reached 19.9 percent, the second-highest half-year result in a decade. Aon’s wider measure shows about $790 billion at end-March. Swiss Re Institute, via Artemis, estimates H1 insured natural catastrophe losses at $42 billion, 16 percent below the ten-year average and the lowest first half since 2020, although H2 has historically carried about 58 percent of annual losses.
January 2027: price before terms
Reinsurance News reported on 1 October that Autonomous believes the Monte Carlo messaging is preparing the market for property-cat declines of 10-15 percent at 1 January 2027; this is a signal, not a realised index. Marsh puts property-cat rates down roughly 16 percent through 2026, and reinsurers appear willing to concede price rather than allow terms to slip. Gallagher Re’s Keith Lippmann summed it up: rate reductions are the fuel, not the finish line.
Latin America: buyers have the leverage
Insurance Business reported that the 1 July LatAm renewal delivered property-cat XoL reductions of 15 to 20 percent, with proportional ceding commissions up two to three points and cedents buying smaller cat limits. Fitch, writing in Insurance Journal, notes regional written premium of $245.1 billion in 2025, with Mexico’s return on equity at 20.1 percent but a sector outlook of deteriorating and an 81.3 percent loss ratio. Appetite is migrating towards casualty and specialty lines, which is precisely where discipline tends to erode first.
For Power Re, a specialist in Group Life & Personal Accident in Latin America, softening property pricing is a reminder not to chase capacity-driven cycles outside our core. We stay focused on mortality and accident risk selected on data, priced to technical margin and supported by a prudent retrocession panel, because durable ratings are built on consistency through the cycle rather than volume at the top of it.
Power Re perspective
This commentary reflects Power Re’s reading of public market reporting. It is general information, not underwriting, investment or legal advice.
