U.S. Insurance: Reducing reinsurance premium forecast in wake of a soft Florida catastrophe renewal

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U.S. Insurance: Reducing reinsurance premium forecast in wake of a soft Florida catastrophe renewal

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U.S. Insurance

Reducing reinsurance premium forecast in

wake of a soft Florida catastrophe renewal

Price Objective Change

Prices for prop-cat reinsurance down more than expected 10 June 2026

Despite prices having already declined in 2024 and 2025, we expect that regional Equity

Florida/Gulf of Mexico prices for property-cat reinsurers will be down 15-20% as the United States

impact of 6/1 and 7/1 renewals are assessed. Broker Howden Re described Florida Insurance

renewals as being down as much as 25% in some cases and re-tracing back to 2010- Joshua Shanker

2012 levels of profitability. We are cutting our revenue forecasts for Arch Capital, Research Analyst

Everest and RenRe in response. EPS revisions are modest, and we detail the moving BofAS+1 347 821 9017

pieces for each company on the pages to follow. joshua.shanker@bofa.com

Cyril Onyango

Two mechanisms of volume decline intertwined ResearchBofAS Analyst

We expect declining prices to push down property-cat reinsurance premiums on a gross cyril.onyango@bofa.com

basis, but we also suspect canny underwriters will use the softer market conditions to Fatima Keita

Research Analyst

purchase countervailing reinsurance and retrocessional to lower their respective cat-risk BofAS

volatility. The result will be lower net revenues, but also lower risk. Generally, we believe fatima.keita@bofa.com

the market prefers high-priced risk and ignores the lower risk profile. We are reducing

our catastrophe load in our forecasts, offsetting some of the impact of price decline. We

expect favorable development related to Hurricanes Ian, Helene and Milton and the L.A.