By The Underwriting Department
Klapton Re – January 2026 Renewal Market Note
The January 2026 renewal season reflects a reinsurance market that has moved firmly into a softer phase. The 2025 renewal cycle was what some characterized as a hard market softening, and signs of softening were evident during the course of the year and became more pronounced toward the second half. By January 2026, abundant capital, strong reinsurer profitability, and increased competition had accelerated this trend, resulting in a buyer-friendly renewal environment across most major lines.
Reinsurer pricing behavior during the January 2026 renewals showed a clear shift compared to earlier cycles. Pricing eased materially on well-performing and non-loss-affected business, while reinsurers continued to differentiate based on loss experience, exposure quality, and program structure. Rate reductions were most evident where risk information was clear and where portfolios demonstrated stable performance. Conversely, accounts with recent losses, weaker data quality, or aggregation concerns continued to attract firmer pricing, albeit with greater flexibility than during the peak of the hard market.
A notable feature of the pricing environment was the continued use of high attachment points established during the hard market. These structures have largely remained in place, allowing reinsurers to reduce pricing while maintaining protection against frequency and severity. This approach supported competitive pricing outcomes without a corresponding relaxation of structural discipline.
These observed pricing trends are consistent with broader market reporting. Coverage by Reinsurance News noted that the January 1, 2026 renewals recorded some of the largest pricing declines seen in many years. Howden’s renewal analysis indicated that global property catastrophe risk-adjusted rates-on-line declined by an average of 14.7%, accelerating from an 8% reduction in 2025 and marking the largest year-on-year decrease since 2014. This aligns with observed outcomes across multiple regions and segments.
Market conditions were further shaped by elevated reinsurer capital levels and strong recent returns. Commentary from Gallagher Re highlighted that high levels of available capital and competition for deployment set the tone for the January 2026 renewals. Cedants entered the renewal period with greater choice, while reinsurers faced increasing pressure to deploy capacity following several years of strong retained earnings and balance sheet strengthening.
Additional confirmation of these dynamics was provided by Guy Carpenter, which described a softening market driven by capital growth, relatively low reinsured catastrophe losses, and strong reinsurer profitability. Dedicated reinsurance capital is expected to continue growing, reinforcing competitive conditions into 2026.
Primary insurers responded to these conditions by approaching renewals with increased confidence and clearer objectives. Improved choice in the market enabled buyers to challenge pricing assumptions, seek improved terms, and pursue alternative structures where appropriate. However, underwriting discipline at the primary level remained an important determinant of outcomes, with better results achieved by portfolios supported by credible data and consistent risk management.
Broker behavior also evolved in line with the softer market. Brokers played a more active role in remarketing programs, expanding panels, and driving competitive tension, particularly on well-performing accounts. The increased willingness of reinsurers to engage supported more dynamic renewal processes, with greater emphasis on price discovery and program optimization than in previous years.
The retrocession market reflected similar themes. Improved reinsurer capital positions and relatively benign catastrophe experience during 2025 supported a more stable and competitive retro environment. Pricing eased compared to prior years, although discipline remained around structure, attachment points, and aggregation management. Retro purchases continued to focus on capital efficiency and balance sheet protection rather than purely opportunistic buying.
Within the Zambian market, recent regulatory guidance issued by the Pensions and Insurance Authority (PIA) in November 2025, emphasizing the utilization of local capacity, has had a visible impact. We have seen increased lines written locally and a greater willingness by some cedants to retain larger portions of their portfolios within the domestic reinsurance market. This shift is contributing to the strengthening of local industry participants and the development of sustainable capacity.
Overall, the January 2026 renewals confirmed that the softening that began during the 2025 hard-market cycle has accelerated meaningfully. Reinsurers are pricing more competitively while maintaining structural discipline, primary insurers and brokers are actively testing market capacity, and retro markets remain supportive but selective. As 2026 progresses, continued competitive pressure is expected, particularly for well-performing risks, alongside sustained focus on underwriting quality, structure, and long-term portfolio resilience.