Falling rates, rising catastrophe losses: a strategic window for buyers

The general insurance landscape in Australia has remained “soft” in the first half of 2026, producing a continued advantageous environment for buyers. This is the case across most insurance products, and particularly for property.

This is despite 2025 global insured catastrophe loss being in excess of US$100b (approx. US$107b), marking the sixth straight year of global insured catastrophe loss have surpassed the US$100 billion threshold.

2025 also delivered another wave of severe weather across Australia. The Insurance Council of Australia (ICA) recorded multiple catastrophes and significant events, including:

• Ex-Tropical Cyclone Alfred (Feb–Mar) (~$1.5bn in insured losses)
• QLD/NSW hailstorms (Nov) (~$814m)
• Spring storms in SE, QLD & Northern NSW (Oct–Nov) (~$601m)
• North QLD floods (Jan–Feb) (~$304m)
• Mid North Coast & Hunter floods (May) (~$266m)
   

Whilst the above loss events in Australia are not insignificant, the fact is that the Australian insurance market operates within the global insurance marketplace, which largely drives our local market behaviour and cycles. Ultimately, Australia’s insurance market is being shaped by structural forces well beyond local catastrophe experience.

1. Global capital, not local catastrophes, is driving the cycle

On 1 January 2026, global property reinsurance pricing fell across all geographies, returning rates to levels last seen four years ago. Strong reinsurer earnings and record (re)insurance capital deployment continue to drive the pricing landscape.  Some examples of this include:

• Global property catastrophe: down ~14.7%
• Retrocession: down ~16.5%
• Direct & facultative: down ~17.5%¹
   

Re-balancing: Howden's 1.1.26 market report confirms this was a decisive turn, not a marginal easing.

Global reinsurers are now entering 2026 with approximately US$800bn of capital, and in some cases are struggling to deploy planned capacity; a textbook sign that supply is outpacing demand.

From a local perspective, first quarter property renewals reinforced this trend, with loss-free property program rating down 10–15%, primarily driven by local market competition (insurers seeking growth in top-line premium income).

For buyers, the opportunity is clear: improved property rating and broader coverage for well-performing (i.e. – low or no loss programs), well-presented risks. 
 

2. Australia’s June reinsurance renewals follow the tone set in January

Most Australian property catastrophe reinsurance programs renew on 30 June, which, barring any unforeseen major natural catastrophe, will see the global pricing reductions passed on to local insurers. 

This will continue to deliver increased competition, a reduced pricing environment and an improvement in available terms and conditions in the local Australian market in the short term.

As we head into the June renewal cycle, early engagement with the market will continue to be important. This will allow you to test the market, explore alternative deductible and coverage options, and secure the most competitive premium / rating available in the market. 
 

3. Australia is a diversifier in global portfolios

For global (re)insurers, peak perils are concentrated in the U.S. and Japan (earthquake, hurricane and typhoon exposures). 

As a result, even severe ICA-declared events rarely shift global capital or cycle conditions, as noted above. Australia remains a portfolio diversifier, rather than a balance-sheet driver. We often see global (re)insurers looking to increase their Australian portfolio as a hedge against their global cat exposure. This, in turn, increases available capacity in the Australian market, supporting greater competition.

Clear articulation of exposures, credible catastrophe modelling and strong risk engineering assessment support access to competitive capacity.

What this means as we head into 2026

Australian rates continue to trend downwards. As the June renewal season approaches, buyers should expect continued softening, especially for well-presented, non-loss impacted programs.

In a market where global capital, not local headlines, sets pricing, the real advantage lies in how risk is prepared, positioned, and structured. This window will not remain open indefinitely, and buyers who act early are best placed to lock in durable outcomes before macroeconomic or geopolitical factors test capital conditions more broadly.

¹Howden Group Holdings, Re‑balancing: 1 January 2026 (Re)insurance Market Report (2026) <https://www.howdengroupholdings.com/reports/1-1-26-market-report> (accessed 20 March 2026).