Guy Carpenter warns reinsurance pricing will soften but not erase prior increases; capacity returning for Florida

Wade Steer, managing director and head of Guy Carpenter's Tampa office, briefed the subcommittee on global reinsurance trends and what they mean for Florida buyers.

Steer said 2024 produced large aggregate catastrophe losses but that capital returned to reinsurers in 2024 and 2025, improving returns on equity and creating capacity. "For the last 12 months through July, the global property cat rate line index decreased 8%," he told members, and he said the U.S. market saw a smaller decline; Florida-specific pricing, he added, experienced a sharper earlier uptick and is now working back toward equilibrium.

On consumer impact, Steer said buyers should expect some reinsurance-rate relief in 2026 but not at the same pace as the prior market hardening: "There will be reduction in reinsurance rates in 2026, at the pace that they went up, probably not," he said, noting long memory in pricing and program-layer differences that slow pass-through to homeowners' premiums.

Steer also described the role of insurance-linked securities and cat bonds, saying ILS returns have expanded upper-layer capacity and that cap-on programs have materially reduced reinsurance rates for many large domestic writers; he noted about $2 billion of cap-on capacity maturing in 2026 that will create additional cap-on activity.

Members pressed why reinsurer profitability in recent years had not produced proportional homeowner premium declines; Steer said some parts of insurer programs will see reductions sooner than others and reiterated that litigation and frequency history still influence company pricing.

What to watch: Steer recommended monitoring 2026 renewals and cap-on maturities as determinants of how much premium relief reaches consumers. He also said Florida-specific model and treaty terms continue to shape the timing and scale of reductions.