Property cat XoL rates fell 15 to 20 percent at the 1 July Latin American renewal, while AM Best reports facultative reductions of 5 to 20 percent. Munich Re puts H1 2026 global insured nat-cat losses at USD 44 billion and warns of a record El Niño in the second half.
A soft market that keeps softening
Pricing pressure has not eased as the year-end renewal approaches. Insurance Business reported that property catastrophe excess-of-loss rates fell 15 to 20 percent at the 1 July 2026 Latin American renewal, with programmes attracting more capacity than they needed. Ceding commissions on proportional treaties rose by two to three points, and several cedents bought smaller cat XoL limits as they ceded more on a proportional basis. Howden Re noted that property-cat prices fell faster at 1 June than at the 1 January or 1 April renewals, with capacity exceeding demand at every attachment point.
AM Best’s September 2026 Market Segment Report, summarised by Reinsurance News, describes the same picture: the soft cycle has run since the second half of 2024, and facultative business is highly competitive, with reductions of 5 to 20 percent in some areas. Local reinsurers in Brazil posted their first positive underwriting result since 2019, helped by a 15 percent interest rate, but their share of ceded premium has fallen from roughly 70 percent in 2015-18 to 53 percent at end-2025. New capacity from Bermuda, London and MGAs is also moving toward casualty and specialty lines in Chile, Mexico and Brazil.
A benign half-year, and a warning
Munich Re estimates global insured natural catastrophe losses at USD 44 billion for the first half of 2026, against USD 80 billion a year earlier; Aon and Gallagher Re put the figure at USD 47 billion and USD 46 billion respectively. Economic losses were close to USD 112 billion, an insurance gap of about 60 percent. The most destructive event for the region was the double earthquake in Venezuela on 24 June, with insured losses estimated below USD 1 billion, which illustrates how thin cover remains: AM Best notes that less than 24 percent of almost USD 21 billion in regional economic losses were insured, and penetration is below 5 percent of GDP. Both Munich Re and AM Best flag a possible record El Niño in the second half of 2026 as a risk to the region.
Howden Re adds a profitability caveat: reinsurer economic value added has narrowed materially in 2026, and a further decline of similar size could push large parts of the industry below their cost of capital by 2027. The 1 January 2027 renewal will show how far pricing can fall before economics reassert themselves.
What this means for Power Re
Power Re’s focus on Group Life and Personal Accident in Latin America sits largely outside the property-cat price war, but not outside its spillover: surplus capacity looks for adjacent lines, and personal lines are not immune to pressure on rates and terms. Our response is the one a soft market demands: price to technical adequacy rather than to the market floor, keep accumulation and wording discipline on concentrated group exposures, and grow only where expected return justifies the capital it consumes. Retained earnings quality and counterparty security matter more, not less, when the cycle turns.
Sources: Reinsurance News on AM Best Market Segment Report (7 September 2026); Artemis.bm on Munich Re H1 2026 catastrophe losses (30 July 2026); Insurance Business on the Latin American 1 July renewal (30 June 2026); Insurance Business on Howden Re June renewal report (2 June 2026).
Power Re perspective
This commentary reflects Power Re’s reading of public market reporting. It is general information, not underwriting, investment or legal advice.
