Re-balancing: Howden's 1.1.26 market report
2025 reshaped economies and policy agendas worldwide, with major implications for the (re) insurance sector
2025 saw major structural shifts in the global risk landscape
‘Older’ risks such as war, sabotage, (re)armament, populism and protectionism have re-asserted themselves whilst interacting with rapid technological advancement. Currency movements, inflation, interest rates and fiscal consolidation (or lack of) have also returned to the fore, with regional divergence intensifying over the last year.
A global economy that is simultaneously resilient and fragile, with stable (if low) growth through a period of massive change, brings both risk and opportunity. Elevated costs of goods and capital, shifting trade flows, heightened security threats and technological innovation (led by Big Tech and AI) are driving investment and changing risk perceptions.
Healthy supply dynamics and increased competition, particularly in property-catastrophe, created a genuine re-balancing of the market at this renewal.
Key takeaways from our 1.1.26 market report
2025 saw macroeconomic and geopolitical forces converge to crystallise major structural shifts in the global risk landscape.
As risks rise, so too does opportunity for (re) insurance brokers and carriers to demonstrate their value and meet growing demand. Clients and markets backed by best-in-class risk transfer expertise are not only well positioned to trade through the volatility, but also to seize opportunities in a rapidly evolving landscape.
1. Growing competition is delivering lower rates
Most areas of the reinsurance market recorded rate decreases at 1 January 2026 renewals, returning pricing across most major lines to levels last seen around four years ago, albeit with comparatively higher attachments and tighter terms.
Source: Howden, NOVA
2. Rate reductions accelerated across all major property lines
With core programmes placed for less spend than anticipated at 1 January 2026 and with strong signings, some cedents secured supplementary coverage to manage retentions and reduce volatility whilst others plan to deploy their savings to purchase additional protection in the first half of 2026.
3. (Re)insurers delivered economic value added above long-run averages in 9M25
Performance remains strong across the (re)insurance value chain. Both insurers and reinsurers delivered returns above their cost of capital in 2025, even after one of the largest (re)insured losses on record (Los Angeles wildfires).
Source: Source: Howden, NOVA
4. Several areas are projected to outpace the broader P&C market from 2026 to 2030
The current phase of the cycle will reward underwriting excellence and innovation that unlocks new opportunities including in cyber, renewables and data centre construction, areas with high levels of investment and risk transfer demand.
Source: Source: Howden, NOVA
2026: the year of re-balancing
Having moved past the pricing peak in 2024 after a protracted period of hardening, the subsequent softening is re-balancing the market as participants weigh risk and reward in a volatile operating environment.
Conditions are not uniform across classes, reflecting variations in supply and demand dynamics, sensitivity to loss trends and differing macroeconomic influences. A heightened level of global risk further characterises this phase of the cycle.
All of which puts the market in a strong position heading into 2026.
Conditions continue to be favourable across the value chain: buyers are benefitting from rate reductions and improved terms as supply exceeds demand in most areas (to differing degrees) whilst market performance remains strong, delivering healthy profits and returns on capital.
Top-line growth is harder to achieve in this phase of the cycle due to the pricing slowdown and increased competition, underscoring the need for innovation to access new risk pools.
Download the full report today
For in-depth analysis of the pervasive risks and shifting cycles, download the full report today.
At Howden, we are acutely aware of our position in the market and our responsibility to provide a balanced, objective view in the interests of clients. This report attempts to do just that. By bringing the most important sector trends and actionable insights to the fore, Howden is leading the conversation and enabling the delivery of innovative solutions.
We look forward to working closely with insurance and reinsurance carriers in this endeavour, and to supporting our clients in managing change and securing the best coverage available in the marketplace.
Meet the authors
Julian Alovisi
Julian Alovisi
Head of Research
Julian joined Howden in 2020 to lead the group’s research and thought leadership function. Julian brings over 20 years’ experience to the role, operating exclusively in the (re)insurance broking world. At a time of profound change in the insurance and reinsurance market, Howden is elevating sector insights to new heights by publishing relevant and impactful research.
Peter Evans
Peter Evans
Research Director
Peter joined Howden’s group research team as a director in 2024. Peter brings 20 years’ experience to the role, operating across research and strategy in the (re)insurance and consulting sectors. He focuses on innovative uses of data to bring new, actionable insights to Howden’s research, having previously led the insurance insight function for Deloitte.