Global reinsurance and local insurance: how they connect
Property insurance dominates the annual reinsurance cycle. Each January, the global insurance market enters a major renewal period known as “1/1.” During this period, insurers worldwide renew reinsurance contracts that protect them against portfolio losses and major natural catastrophe events they are unable or unwilling to retain.
So, why does this matter?
Because the cost of reinsurance directly influences the premiums you pay through local ‘direct’ insurers such as QBE, Vero and Allianz. The January renewal season effectively sets the tone for pricing and capacity for the year ahead.
For 2026, the reinsurance market is experiencing its largest softening (price reductions) since 2014, driven by:
- Strong profit results reported by insurers and reinsurers in 2025
- Global natural catastrophe losses of around USD $120 billion – high, but still 20% below the five‑year average
- Major events such as the January 2025 Los Angeles wildfires (USD $30B insured loss) and Cyclone Alfred in Australia (AUD $1.2B)
- Strong financial performance attracting new capital into reinsurance, increasing competition
- Reinsurers offering improved terms as they seek to deploy this additional capital
Over recent years, insurers and reinsurers have worked hard to remain profitable while staying competitive for buyers. To manage large‑scale catastrophe exposures, many have introduced per‑event limits, higher deductibles, increased premiums and in some cases withdrawn capacity for specific regions or risk types.
What to expect in 2026
With more capital flowing into the reinsurance market, costs for Australian insurers are expected to fall. This should support continued competition and maintain a buyer’s market through 2026. Premium reductions are likely. However, if you have recent claims or your assets sit in high‑risk locations (cyclone, flood, bushfire or hail‑exposed regions), discounts may be limited. In these situations, premiums may remain stable rather than decrease.
Insurance pricing moves in predictable cycles
When capital is abundant:
→ competition increases
→ premiums fall.
When claims exceed income:
→ capital withdraws
→ premiums rise.
These shifts are driven by supply and demand. CRIS recommends that insurance buyers stay informed about market dynamics and take a medium‑term approach in order to minimise price fluctuations.
CRIS 2026 Insurance Market Outlook
Download the full market update to learn:
- What you need to consider for your next renewal
- Broker 2025 Global Insurance Market Overviews
- International Broker Market Sentiments
- Australia Specific Insights
- Current market conditions and emerging trends
The CRIS Insurance Market Outlook includes a synopsis of the market conditions shared by international brokers in Australia in the lead‑up to late 2025. CRIS anticipates the buyer’s market to continue throughout 2026.