Rates Down 10-15% For “late” 1/1. Cat Bonds Down More. Floridians To Benefit: Dittman And Seo

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Speaking during a panel discussion at the 2025 Florida Chamber Annual Insurance Summit yesterday, Chris Dittman of Aon’s Reinsurance Solutions and John Seo of Fermat Capital Management highlighted that meaningful softening in catastrophe reinsurance rates and the cost of risk capital is expected to flow to the benefit of Floridians in time.

Dittman said that the 1/1 January 2026 reinsurance renewals are already looking a little late, based on what firm orders are out in the market. While he also highlighted that rate declines in the double digits are being seen for Nationwide US catastrophe reinsurance programs.

Seo pointed out that in the catastrophe bond market rate declines of as much as double that are being seen, including for risks in Florida, given the cat bond market trades every day.

The Florida Chamber Annual Insurance Summit is a key event in the State’s calendar, where leaders of the insurance, reinsurance and capital markets come together with legislators, lawmakers, regulators and others to discuss the status of its domestic insurance market.

With reinsurance absolutely critical to Florida’s insurers and so its home and business owners, Dittman and Seo participated in a panel session on the state of reinsurance and risk transfer, including catastrophe bonds.

Encouragingly, a significant topic of conversation was around the renewed and still growing confidence that capital from both traditional and alternative reinsurance markets has in Florida, which the speakers believed bodes well for the State’s ability to recover from future major hurricane events.

First though, Chris Dittman, Head of Florida Strategy at Aon’s Reinsurance Solutions, gave the broker’s view on the state of the end of year reinsurance renewals.

“We’re in the throes of the 1/1 renewal for 2026, and I think it seems a bit late, you know, we’re kind of in the first week in December here and I think from an Aon perspective, we’re kind of behind a little bit in terms of the firm-orders that are out in the market,” Dittman explained.

Adding that, “From what we’re seeing so far, as anticipated, the supply of reinsurance is still exceeding the demand, and we’re seeing rate levels come off between 10% and 15% at 1/1.”

He qualified that by saying that this is for Nationwide US reinsurance program renewals, not for Florida which mostly renews at June 1st, while also explaining that the rate declines being seen are coming off record high levels from the recent hard market in reinsurance.

John Seo, Co-Founder & Managing Director, Fermat Capital Management LLC, said during the session that, “I’m seeing double the rate decreases that Chris is talking about for Florida itself.”

Seo explained that, “The cat bond market tends to be a leading indicator. If rates are going up, you’ll see it first in the cat bond market. But when rates are going down, you’ll see it first in the cat bond market, because it trades every single day.

“It’s a big global market, and it’s not tied to traditional insurance dates, like January 1 or June 1.”

Seo also commented that, “We’re seeing record issuance as we speak and next year is expected to be record issuance.

“The dynamics of the cat bond market is always very interesting. When you have record supply of bonds, people expect that the yield goes up, right? And so therefore the cost, ultimately, to Floridians from the cat bond market might go up, but it’s really just the opposite.

“The issuance is exploding because investor demand has picked up significantly.”

Dittman also commented that one thing that is perhaps surprising is that no one in reinsurance is talking about the major hurricanes that impacted Florida in 2024 any more. But he highlighted that this is due to the higher confidence levels in that marketplace.

Dittman said, “We’re only a year removed from having two Cat 3 plus hurricanes in Florida, and nobody’s talking about that. If this were 2018 or 2019 all anybody here would be talking about is Hurricane Irma.

“We’ve spent a lot of time this morning talking about the legal environment here in Florida and all the changes. I can’t stress enough how significant that is. As we sit here and send our submissions out to the market and talk about loss costs, not having to deal with that social inflation factor that nobody can price into the business that we’re all writing is significant, and we need to do everything we can to keep that going. It really, really helps tremendously.

“So, I think at a high level we’re seeing rates come right around double digits off. I think it’s healthy. I think we’re seeing people, there is model change out there, right, so there’s going to be a little bit of an increase in demand from people.

“I think as rates come down, we’ll see people buy a little bit more vertically. Retention levels got pushed up in 2023 as well. So, whether we see some buy downs or some sideways aggregates and things like that, there’s been a lot of discussion around that, it’ll be a different product, and probably different rate level, but will help the supply of reinsurance that everybody here wants to provide. And obviously the cat bond market is pretty frothy right now, so I think we’re breaking records this year.”

John Seo also commented on the improved perception that capital providers now have of the Florida insurance market.

“I really feel very, very good for the market. These legislative reforms are now finally being recognised as valid and as holding for the moment and that’s being reflected in the price that the cat bond market is showing. It’s showing confidence that these reforms are actually taking place. I think it’s really amazing.

“Thank goodness that it did happen, because our market was pulling away from Florida. We’re very happy to take the hurricane risk. It could happen tomorrow, I don’t think the market will blink an eye. But to have that type of instability on the litigation side is just not something that the market is comfortable with dealing with.

“So that’s the good news. I do see significant rate decreases coming for everyday Floridians, and we all know that’s necessary. There’s little bit of patience needed, understanding it takes time for these rate decreases to come through. But it looks like they should be coming.”

Later during the panel Seo said that it would be a dream to see insurance rates remaining relatively stable in Florida after the next major hurricane occurs, reflecting the greater confidence that capital now has in that marketplace after the legislative reforms and given the higher quality and capitalisation of domestic market insurance participants.

However, he did also caution that the insurance-linked securities market and its global investor base do watch legislative developments closely in Florida and while confidence is higher any signs that reforms could be rolled-back would not be looked on favourably.

Commenting on current Florida market conditions, Seo said, “I’ve never felt better about this market than I do right now.”

Also during the same panel discussion at the 2025 Florida Chamber Annual Insurance Summit yesterday, Justin O’Keefe, SVP, Chief Underwriting Officer at reinsurer RenaissanceRe highlighted that Florida should expect to benefit from the reinsurance market softening currently being seen.

“We’re a reinsurer and you’re probably asking why are you talking about rate decreases and why do you have a smile on your face? I have a smile on my face because I think the risk is much more predictable today than it was three years ago, and we can bring more capital in the system with higher confidence, which means that we don’t need as high of a margin then to take that risk as we would have before the tort reforms,” O’Keefe said.

Adding that, “I fully expect going into the mostly June 1st renewals for the Florida homeowner’s marketplace, for our clients to see, I would say, material rate increases on their reinsurance, which I think is good for everyone and the sustainability of the Florida market.”

While the commentary on rate provides strong indications for where the end of year renewals are heading and for what the June 2026 renewals may also see, as well as for the strong appetites investors are showing for catastrophe bonds, the sentiment that this should benefit insurance market’s and policyholders in State’s like Florida is positive.

As usual though, the question remains on how disciplined the market can be as it executes at softer rates over the coming months and through 2026.

While the need for discipline is also applicable to the lawmakers and regulators, who need to ensure legislative stability and rigour in insurance market’s such as Florida if they want to see risk capital continuing to display such a strong appetite for their catastrophe risks.

Rates down 10-15% for “late” 1/1. Cat bonds down more. Floridians to benefit: Dittman and Seo was published by: www.Artemis.bm
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