Catastrophe losses strain reinsurers as 6-year $100b streak persists

Contract structures kept higher attachment points though some exclusions tightened.

Globally insured catastrophe losses have exceeded $100b for six straight years, increasing risk pressure on reinsurers according to AM Best.

Other key risks highlighted include ongoing “social inflation” in casualty lines and macroeconomic uncertainty. 

Despite the challenges, AM Best said capital remains strong, projecting about $540b in traditional reinsurance capital and about $120b in insurance-linked securities (ILS) capital at the start of 2026, whilst higher interest rates continue to support investment income. 

AM Best has revised its outlook for the global non-life reinsurance segment to stable, from positive, citing faster-than-expected softening in property reinsurance pricing and continued pressure in casualty lines. 

The agency pointed to the 1 January, 2026 renewals, where property reinsurance rates fell by 10% to 20%, with the biggest declines on accounts without recent losses. 

It said pricing is moving closer to pre-2023 levels, although property catastrophe pricing still appears above technical adequacy. 

AM Best said terms and conditions have largely held, including higher attachment points, even as some wording has broadened and certain exclusions have narrowed. 

It also noted more capacity for aggregate covers, but said these are still typically structured with higher attachment points or second-event protection.