Dedicated reinsurance capital reached a record near US$648bn while property-cat rates fell 20-25% in North America at 1 July, confirming a firmly buyer-friendly market.
The 1 July 2026 renewal closed with the softening seen at January and April not only intact but deepening. Cedants secured risk-adjusted rate reductions across most classes and geographies, and brokers describe conditions that firmly favour the buyer, paired with a renewed appetite for more creative and efficient risk-transfer structures.
A market awash in capital
Dedicated reinsurance capital ended 2025 at a record near US$648 billion, an 11% rise driven largely by retained earnings, with total sector capital estimated close to US$790 billion at mid-year 2026. Non-life alternative capital added roughly US$135 billion, up around 18% year on year. With premium growth of barely 1%, supply is outrunning demand, and price is the release valve.
Property catastrophe rates fell 20% to 25% or more for the best-performing North American accounts at 1 July, and Guy Carpenter’s global property rate-on-line index is down about 16% over the 2026 renewals, its steepest annual decline since the late 1990s. First-half natural-catastrophe losses of roughly US$38 billion sat below the ten-year average, leaving reinsurers with healthy budgets and projected returns on equity of 14% to 15% after a near-19% result in 2025.
Latin America broadens and softens
In Latin America the same forces are at work. Property-cat excess-of-loss programmes renewed down 15% to 20% as Bermuda, London and MGA capacity joined established local players, deepening the panel and handing cedants leverage on both price and structure. Brokers point to over-placement, rising ceding commissions and appetite migrating into casualty and specialty lines; in Brazil, softer rates arrive alongside higher attachments, consistent with the global pattern.
What it means for a specialist reinsurer
A capital-rich soft market rewards restraint, not reach. Power Re’s discipline is to decline the marginal account, hold terms and conditions where the market over-corrects, and deploy capacity only where the technical price still earns an adequate risk-adjusted return. In Group Life and Personal Accident, the enduring Latin American protection gap, not the property-cat price war, defines the opportunity, and it is won with underwriting judgment and regional relationships rather than balance-sheet size. Growth by selection, cycle after cycle, is what protects a young reinsurer through a softening market.
Power Re perspective
This commentary reflects Power Re’s reading of public market reporting. It is general information, not underwriting, investment or legal advice.
