How 1 April renewals pushed Japan cat rates down 16%

Howden Re said another year of low catastrophe losses helped drive the decline.

Reinsurance renewals at 1 April continued the softening trend seen earlier in the year, with risk-adjusted property catastrophe rates returning to levels last seen in the early 2020s, according to Howden Re.

In Japan, catastrophe excess-of-loss programmes recorded risk-adjusted price reductions of up to 20%, with a point estimate of 16%. 

The decline was driven by favourable global market conditions and another year of low catastrophe losses in the country. 

In proportional business, commissions on property surplus and earthquake quota share treaties rose by 2 to 5 percentage points, with the higher end more common for earthquake quota share placements.

Andy Souter, Head of Asia-Pacific at Howden Re, said rates in Japan have broadly returned to early 2020s levels, supported by strong reinsurer appetite, improved underlying performance and limited major loss activity. 

Reinsurers maintained a disciplined approach, focusing on retaining existing positions, although some capacity providers sought selective growth. 

Supply and demand remained broadly stable compared to the previous year, with most programme structures unchanged and only limited adjustments.

Geopolitical tensions in the Middle East, including the closure of the Strait of Hormuz following US and Israeli strikes on Iranian targets in February 2026, did not directly affect the 1 April property catastrophe renewals. 

The impact has so far been concentrated in specialty lines such as marine war risk, energy and political violence, where capacity has been repriced at several multiples of pre-conflict levels.

David Flandro, Head of Industry Analysis and Strategic Advisory at Howden Re, said the property catastrophe market remained largely insulated from the disruption. 

However, he noted that a prolonged energy supply shock could increase inflation and interest rates, which have historically influenced reinsurance capital and pricing across multiple lines.

Looking ahead, mid-year 2026 renewals are expected to face more complex conditions. Pricing in marine, energy and political violence lines is likely to increase further as the effects of the Hormuz disruption are fully reflected. 

For property catastrophe business, pricing trends will depend on loss activity in the first half of the year, as well as broader factors such as energy prices, inflation, interest rates and capital market conditions.

Souter said the market remains well capitalised and active, but added that discipline, transparency and close monitoring will be important as conditions become more challenging in the months ahead.