Updated October 1, 2026.
Property insurers are repricing with forward-looking catastrophe models as secondary perils—wildfire, severe convective storms, and flood—drive most loss. Reinsurance softened at January 2026 renewals while retail rates still climb; catastrophe bonds set an H1 record near $18 billion across 83 deals (Artemis).
Catastrophe modeling and climate risk pricing
Cat models simulate hazards and map them to insured loss; climate risk pricing feeds those outputs—average annual loss, tails, regulatory scenarios—into premium, deductibles, and capacity. In 2026 the story is secondary-peril persistence and models that no longer treat history as stationary.
Loss and pricing in 2026
Swiss Re Institute estimates 2025 global insured natural-catastrophe loss at about USD 107 billion (190 events)—lowest in five years but still elevated. Secondary perils hit a record 92% share (USD 98.3 billion); wildfire, severe convective storms, and flood alone were 88%. January 2025 Los Angeles-area wildfires drove roughly USD 40 billion insured; global severe convective storm loss stayed near USD 51 billion. Swiss Re’s long-run trend still implies ~5–7% real annual growth; a return to trend could land near USD 148 billion in a normal year.
Primary homeowners rates keep rising despite softer reinsurance—often cited near 4% in 2026 nationally (~USD 3,057), with sharper moves in California and several central states and Florida still highest. See climate risk and insurance pricing in 2026.
California wildfire filings
California’s Sustainable Insurance Strategy lets carriers use Department-reviewed forward-looking wildfire cat models and net reinsurance in rate filings, with write commitments in wildfire-distressed ZIP codes to shrink FAIR Plan reliance. Verisk, Karen Clark & Company, and Moody’s RMS completed review. Trade-off: higher modeled premiums in fire zones versus better voluntary-market availability when carriers can price to survive.
Models, reinsurance, and cat bonds
Vendors (Moody’s RMS, Verisk, CoreLogic/Cotality, KCC, Reask, Jupiter) rolled climate-conditioned and secondary-peril updates in 2025–2026—higher forward hail/wind/wildfire loss costs in many portfolios. Insurers blend vendor views with own-view-of-risk; NAIC property RBC filers report climate-conditioned hurricane and wildfire impacts using approved catalogs. Start with catastrophe modeling: the complete guide (2026).
Howden Re put risk-adjusted global property-cat reinsurance rates-on-line down ~14.7% at January 1, 2026—the steepest drop since 2014—as capital stayed strong and 2025 lacked a major U.S. hurricane landfall. Retail rates lag filings and modeled loss inflation; see hard vs soft market (2026).
Artemis tracked ~USD 18 billion of Rule 144A and private cat-bond issuance across 83 transactions in H1 2026—a first-half record—as sponsors added wildfire, quake, and secondary-peril covers. Triggers and structures tie to parametric insurance and catastrophe bonds; align limits with modeled PML via catastrophe portfolio management.
Regulation and disclosure
The NAIC Climate Risk Disclosure Survey for reporting year 2025 is due August 31, 2026 for large writers in participating states, including cat-model use for climate risks. Federal SEC climate rules may shift, but state hooks remain—see SEC rescission and the NAIC survey timeline. NFIP Risk Rating 2.0 continues to phase through federal flood policies; private flood cat modules still run ahead of political caps on NFIP pricing.
Action checklist
- Re-rate locations on forward peril views, not 2010s ZIP memory.
- Split wind/hail/flood sub-limits; stress secondary perils apart from hurricane.
- Document mitigation for underwriting and claims.
- Compare 1.1 reinsurance savings with cat-bond/parametric capacity where basis risk is acceptable.
Frequently Asked Questions
How large were 2025 insured catastrophe losses?
Swiss Re Institute estimates about USD 107 billion globally. Secondary perils—wildfire, severe convective storms, and flood—were 92% of the total, including roughly USD 40 billion from January 2025 Los Angeles-area wildfires and about USD 51 billion from severe convective storms.
Why did reinsurance fall in January 2026 while homeowners rates rose?
Howden Re reported risk-adjusted global property-cat rates-on-line down about 14.7% at January 1, 2026 renewals, helped by strong capital and no major U.S. hurricane landfall in 2025. Primary carriers still face higher modeled loss costs, rebuild inflation, and filing lag, so retail property rates kept climbing in many states.
What happened in cat bonds in H1 2026?
Artemis recorded about USD 18 billion of issuance across 83 Rule 144A and private cat-bond transactions in the first half of 2026—a first-half record—as sponsors placed more U.S. wind, wildfire, earthquake, and secondary-peril risk in ILS form.
Can California use cat models in rate filings?
Under California’s Sustainable Insurance Strategy, insurers may use Department-reviewed forward-looking wildfire cat models and net reinsurance in filings, with commitments to write specified shares in wildfire-distressed ZIP codes. Verisk, Karen Clark & Company, and Moody’s RMS models completed review.
What are regulators asking about cat models in 2026?
The NAIC Climate Risk Disclosure Survey for reporting year 2025 asks large participating insurers how they identify climate-related risks and whether they use catastrophe modeling to manage them, due August 31, 2026. Property RBC filers also report climate-conditioned hurricane and wildfire modeled impacts.
Updated October 1, 2026.
Property insurers are repricing with forward-looking catastrophe models as secondary perils—wildfire, severe convective storms, and flood—drive most loss. Reinsurance softened at January 2026 renewals while retail rates still climb; catastrophe bonds set an H1 record near $18 billion across 83 deals (Artemis).
Catastrophe modeling and climate risk pricing
Cat models simulate hazards and map them to insured loss; climate risk pricing feeds those outputs—average annual loss, tails, regulatory scenarios—into premium, deductibles, and capacity. In 2026 the story is secondary-peril persistence and models that no longer treat history as stationary.
Loss and pricing in 2026
Swiss Re Institute estimates 2025 global insured natural-catastrophe loss at about USD 107 billion (190 events)—lowest in five years but still elevated. Secondary perils hit a record 92% share (USD 98.3 billion); wildfire, severe convective storms, and flood alone were 88%. January 2025 Los Angeles-area wildfires drove roughly USD 40 billion insured; global severe convective storm loss stayed near USD 51 billion. Swiss Re’s long-run trend still implies ~5–7% real annual growth; a return to trend could land near USD 148 billion in a normal year.
Primary homeowners rates keep rising despite softer reinsurance—often cited near 4% in 2026 nationally (~USD 3,057), with sharper moves in California and several central states and Florida still highest. See climate risk and insurance pricing in 2026.
California wildfire filings
California’s Sustainable Insurance Strategy lets carriers use Department-reviewed forward-looking wildfire cat models and net reinsurance in rate filings, with write commitments in wildfire-distressed ZIP codes to shrink FAIR Plan reliance. Verisk, Karen Clark & Company, and Moody’s RMS completed review. Trade-off: higher modeled premiums in fire zones versus better voluntary-market availability when carriers can price to survive.
Models, reinsurance, and cat bonds
Vendors (Moody’s RMS, Verisk, CoreLogic/Cotality, KCC, Reask, Jupiter) rolled climate-conditioned and secondary-peril updates in 2025–2026—higher forward hail/wind/wildfire loss costs in many portfolios. Insurers blend vendor views with own-view-of-risk; NAIC property RBC filers report climate-conditioned hurricane and wildfire impacts using approved catalogs. Start with catastrophe modeling: the complete guide (2026).
Howden Re put risk-adjusted global property-cat reinsurance rates-on-line down ~14.7% at January 1, 2026—the steepest drop since 2014—as capital stayed strong and 2025 lacked a major U.S. hurricane landfall. Retail rates lag filings and modeled loss inflation; see hard vs soft market (2026).
Artemis tracked ~USD 18 billion of Rule 144A and private cat-bond issuance across 83 transactions in H1 2026—a first-half record—as sponsors added wildfire, quake, and secondary-peril covers. Triggers and structures tie to parametric insurance and catastrophe bonds; align limits with modeled PML via catastrophe portfolio management.
Regulation and disclosure
The NAIC Climate Risk Disclosure Survey for reporting year 2025 is due August 31, 2026 for large writers in participating states, including cat-model use for climate risks. Federal SEC climate rules may shift, but state hooks remain—see SEC rescission and the NAIC survey timeline. NFIP Risk Rating 2.0 continues to phase through federal flood policies; private flood cat modules still run ahead of political caps on NFIP pricing.
Action checklist
- Re-rate locations on forward peril views, not 2010s ZIP memory.
- Split wind/hail/flood sub-limits; stress secondary perils apart from hurricane.
- Document mitigation for underwriting and claims.
- Compare 1.1 reinsurance savings with cat-bond/parametric capacity where basis risk is acceptable.