Reinsurers carried about 12% of insured losses in 2025, down from roughly 20% in 2023, and Marsh Re's Leon Janeke expects that share to climb back through 2027 (Reinsurance News, October 16, 2026). That figure sets the agenda at the Baden-Baden meeting that opened on October 18: after three years of rate cuts on programs that attach too high to respond, European cedants want the attachment point itself.
The July 13 to 19 convective storms across Germany, France, Switzerland and Italy gave them the argument. PERILS put the industry loss at EUR 2.186 billion, the largest for that peril in its European record, with an updated estimate due October 19 (The Insurer, September 2026). Most of it stayed with primary carriers, and The Insurer reports that limited recoveries will drive a more aggressive push for lower attachments at January 1 (The Insurer, October 18, 2026).
Key Takeaways
- 20% to 12%: reinsurers' share of insured losses fell by about eight points between 2023 and 2025 on Marsh Re's count, and Guy Carpenter puts the 2025 figure at 11%, the direct result of the attachment points and terms reset at the January 2023 renewal.
- EUR 2.186 billion of July hail and wind loss in four countries sat almost entirely below European occurrence attachments, so a record event for the peril produced the recoveries of a quiet year.
- 16% and 14.7%: Guy Carpenter's global property catastrophe rate on line index is down 16% through the mid-year renewals and Howden measured a 14.7% risk-adjusted decline at January 2026, with Germany's cuts the shallowest in Europe at 8% to 11%.
- $790 billion of reinsurance capital at mid-year on Aon's count, and a Gallagher Re stress test showing the sector could absorb a $75 billion event and still earn its cost of equity, is the supply that cedants expect to convert into structure rather than price.
- CHF 1.7 billion: Swiss Re's estimate for Swiss insured losses alone from the July storms, inside a half-year in which the group's own results drew on a cat budget it did not spend.
The Loss-Share Arithmetic Behind the Ask
The 2023 renewal moved occurrence attachments up and withdrew aggregate and frequency covers across the European and US books, and the loss share tracked the structure: Guy Carpenter estimates reinsurers' share of industry losses fell to 11% in 2025 from about 20% before the shift (Artemis, July 2026). The site's Howden Re analysis put the same gap at reinsurers carrying 40% of exposure and paying under 25% of 2025 losses. Both measures describe the same retained layer, and it is the layer the July storms fell into.
Price moved the other way at every renewal since. Howden's January 2026 report measured a 14.7% risk-adjusted decline in global property catastrophe rate on line, the largest since 2014, with Germany down 8% to 11% while France, Italy, Switzerland and the UK took larger cuts (Howden, January 2026). Guy Carpenter's global index is down 16% through June and July, and its US index sits 22% below the 2024 peak. A German cedant renewing at Baden-Baden has had the smallest price relief in Europe and the largest retained hail loss.
Reinsurer guidance into the meeting conceded the price and held the terms. Hannover Re's September 7 outlook expects "slightly lower prices" with terms and conditions "broadly unchanged" and at least stable capacity (Hannover Re, September 2026). Munich Re said in July that prices and terms can be "largely upheld" at January 2027. Moody's expects terms to hold; Fitch expects further softening with more cedant flexibility. The site's Monte Carlo read was that the January print would show a cut near 10% with the attachment point left where 2023 put it.
Why a Lower Attachment Costs More Than a Rate Cut Saves
A rate-on-line reduction on an unchanged program changes what the cedant pays and nothing about what it recovers. A lower attachment changes both. The expected loss to an occurrence layer rises steeply as the attachment moves down into the frequency zone of a peril like European hail, where a EUR 2 billion industry event spreads across many cedants in sub-limit losses, so the reinsurer's expected loss to the layer can rise faster than the rate on line it has just conceded. The two concessions are priced against each other, and a reinsurer that gives both has sold a quiet-year margin and a loss-year recovery in the same contract.
Howden Re's Tobias Andersson told the meeting that European cedants should use the soft market to improve catastrophe protection rather than negotiate lower prices for the same programs (Intelligent Insurer, October 18, 2026). Mapfre Re is unconvinced on lower attachments for higher-frequency perils, and MS Re's Philippe Froncioni expects "significant divergence" in how reinsurers price catastrophe after several benign years, with some buyers adjusting retentions or limits and others choosing to retain more (Intelligent Insurer, October 2026).
For the cedant's actuary the retained hail layer sits in two places. It is in the net annual average loss that the primary rate indication carries, the recalculation the site set out in May's cat-load piece, and it is in the capital model as a one-in-ten rather than a one-in-fifty event. Buying the attachment down moves expected loss from the net AAL into the ceded premium, and whether that trade is worth it depends on the reinsurer's price for the lowered layer, which is the number Baden-Baden exists to discover.
Casualty offers no relief on the other side of the table: Janeke sees "considerably more optimism" in property than casualty, and Guy Carpenter recorded ceding commissions down about a point at July on US treaties with adverse development (Guy Carpenter, July 2026).
| Indicator | Figure | Source |
|---|---|---|
| Reinsurers' share of insured losses, 2023 | about 20% | Marsh Re, Guy Carpenter |
| Reinsurers' share of insured losses, 2025 | 11% to 12% | Guy Carpenter, Marsh Re |
| July 2026 European SCS industry loss | EUR 2.186B | PERILS, first estimate |
| Global property cat rate on line, Jan 2026 | down 14.7% | Howden |
| Global property cat rate on line, mid-2026 | down 16% | Guy Carpenter |
| Reinsurance capital, mid-2026 | $790B | Aon |
| Loss the sector can absorb and still earn cost of equity | $75B | Gallagher Re |
Sources as cited in the text. The two loss-share series use different loss bases and are not directly comparable, but both record a fall of eight to nine points since the 2023 structural reset.
The Capital That Bids to Undo 2023
Aon counted a record $790 billion of reinsurance capital at the mid-year renewals and expects reinsurers to offer greater flexibility in structures, coverage and retentions heading into 2027 if losses stay in line (Reinsurance News, July 2026). Gallagher Re's September stress test found the sector could absorb a $75 billion event on top of normal second-half losses and still earn its cost of equity, and raised its full-year return-on-equity forecast to 16.5% to 17.5% (The Insurer, September 2026). Swiss Re's Leopoldo Camara called the growing supply "actually good news because more capital is needed to address the growing risks."
Those returns were earned on the 2023 structure. A 12% loss share at a 2026 rate on line produced the retained earnings behind most of the $790 billion, and that capital is what lets cedants ask for the 2023 structure back. Janeke's forecast that the share rises through 2027 is the same call from the other side: reinsurers will take more of the large and catastrophe losses at January 1 because the market has the capital to sell it. Howden's June warning that another 10% to 15% decline would push much of the industry below its cost of capital by 2027 was written for the price; it applies with more force to the attachment.
The complication is in the sequence. A cedant that buys its hail attachment down at January 1 converts a 2026 rate saving into a 2027 recovery, and pays for that recovery at a rate on line the reinsurer set while its loss share was 12%. The reinsurer that sells it has priced 2027 on an expected loss to layer it last carried in 2022, before the restructuring that produced the capital it is now deploying. The PERILS update due today is the first number both sides carry into the room, and it measures an event the program being repriced was built not to see.