As the property direct and facultative (D&F) and binders treaty reinsurance market approaches the end of 2025, industry participants are experiencing what Howden Re describes as a “hard market softening”.
The reinsurer notes that the transition is marked by a need for discipline and collaboration among cedants, reinsurers, and brokers.
Paul Esterbrook (pictured right), managing director at Howden Re, said, “This is not a market that rewards short-term thinking.” He noted that while market cycles come and go, enduring partnerships are built on transparency and consistency.
Esterbrook added that since the launch of Howden Re four years ago, the firm has established a substantial client base in the D&F and binders treaty space, with market share increasing each year.
Reinsurer appetite remains strong for cedants with proven performance, and capacity for well-performing portfolios has remained steady. This is supported by greater flexibility and a balanced approach to catastrophe exposures. Esterbrook described the current environment as a mature marketplace, where continuity in relationships enables meaningful conversations and trust.
Following the recalibration after Hurricane Ian, which saw attachment points rise, the past two years have brought a slight reduction in those points. This has allowed for innovation in program design, as cedants and reinsurers seek structures that improve capital efficiency and broaden protection.
Chris Medlock, director of global specialty treaty at Howden Re, emphasized the evolving role of the broker.
“Clients don’t want a broker who is just a postbox,” Medlock said. He explained that clients expect brokers to understand both sides of the table, interpret nuances, manage outcomes, and communicate effectively.
The current market phase is characterized by rates that are moderating but remain above historic levels, according to a previous Howden Re report. The sector is transitioning from a period of rate hardening that began in 2022–2023 to a “hard market softening,” with risk premiums structurally higher than in previous cycles.
Despite a 5% year-over-year decline in property catastrophe reinsurance pricing in the first half of 2025, premium volumes in property catastrophe lines climbed 15% as carriers pursued exposure growth rather than relying solely on price increases.
As 2026 renewals approach, Howden Re said that its property specialty team remains focused on reinforcing the foundations that help clients navigate the evolving market.
