THIS WEEK'S RMN
MARKETS · Reinsurance Industry, Verisk Push Back On Regulators' Homeowners Insurance Affordabilty "Playbook"
Two major insurance industry voices are challenging a draft NAIC guidance document, arguing that state regulators are targeting the wrong culprit in the homeowners insurance affordability crisis. — Read →
MARKETS · Edison Joins Industry Call for Wildfire Liability Reform for California Utilities
Edison’s CEO said a “whole of society” approach is needed for wildfire losses that have been attributed to electric infrastructure failures. — Read →
MODELS · NOAA Research Restructuring Puts Catastrophe Model Science at Risk, Lawmakers Warn
The budget proposal would dissolve federal hurricane and severe weather research infrastructure. — Read →
MARKETS · PG&E Draws Hard Line on California Wildfire Reform
PG&E's $73 billion capital plan has a contingency clause and it runs through wildfire liability.— Read →
Two major players on opposite ends of the risk markets signaled this week that the property catastrophe hard market has peaked, and that both are restructuring their businesses to reduce dependence on a line that has now retraced years of rate gains in just two renewal cycles.
Munich Re CEO Christoph Jurecka, speaking at the company's annual general meeting on Wednesday, told shareholders the shift was well underway.
"The peak of the hard market of attractive market conditions seems to have come and gone," he said, noting that prices fell in the most recent renewal round.
Munich Re posted a combined ratio of 73.5% in property casualty reinsurance for 2025 — a result Jurecka attributed in part to the absence of a major U.S. hurricane landfall — but the company is not counting on a repeat.
At the retail and wholesale brokerage level, Brown & Brown CEO Powell Brown confirmed the same dynamic from the placement side. Speaking on the company's first quarter earnings call Tuesday, Brown described E&S CAT property rate declines of 15% to 35% across most placements in Q1, with further pressure expected heading into the second quarter.
"The rates that we're seeing in coastal property today are similar to those that we saw in 2016 and '17," Brown said. "It went up for five or six years. And then it has reduced all of that in a two-year period."
Both companies are responding with the same strategic logic: diversify away from property cat before the cycle fully unwinds.
Munich Re's Ambition 2030 strategy targets a reduction in property casualty reinsurance's share of group net results from roughly half to approximately 40 percent by decade's end, with life and health reinsurance, ERGO primary insurance, and Global Specialty Insurance absorbing the difference.
Jurecka argues the shift as structural rather than tactical. "Depending on the appeal and attractiveness of the market, contributions to our net result from property casualty reinsurance will increase or decrease," he said. "That is the true strength of our business model."
Brown & Brown made a parallel move through its acquisition of Accession, whose 180 specialty business carries a significantly heavier casualty weighting and minimal property exposure. CFO Andrew Watts noted that this pivoi was deliberate: the addition was designed to "level out some of the peaks and valleys" in specialty distribution revenues driven by CAT property pricing swings.
The diversification push comes as a related coverage gap remains unresolved.
Brown & Brown's Wright Flood unit is one of the largest participants in the National Flood Insurance Program (NFIP), and Powell Brown offered a blunt assessment of where private market appetite ends.
"The private market will not absorb the areas in the worst flood zones," he said on Tuesday's call. "Don't allow somebody that says we're writing private flood to lead you to believe that they're writing that in downtown New Orleans."
That constraint matters increasingly as global insured catastrophe losses remain elevated. Munich Re's Jurecka noted that annual insured losses from natural disasters exceeded $100 billion globally for the second consecutive year in 2025, even without a major U.S. hurricane event. The LA wildfires alone represented a significant loss driver at the start of the year.
With NFIP reauthorization still running on short-term extensions and private carriers unwilling to absorb the highest-risk flood zones, the question of who ultimately holds residual flood risk remains open — even as the reinsurance market softens and both reinsurers and brokers recalibrate their CAT property exposures.
Did The Wildfire Safety Net Become a Wrecking Ball?
Janet Chen didn't start out as an insurance critic. She's a former deputy mayor of Los Angeles with a finance background, and on the night of January 8th, 2025, she was running a pickleball WhatsApp group. When the Eaton Fire swept through Altadena with no official evacuation alerts, that group became the neighborhood's emergency coordination system. Within weeks it had grown into the Every Fire Survivors Network (now 10,000-plus members) and what Chen found inside that network reframed the story she thought she was telling.
The LA fires are now the most expensive wildfire disaster in U.S. history. That means a real-time stress test of the entire insurance value chain — from how models priced the risk, to how policies were written and sold, to how claims are being managed on the ground. Chen's network has spent the last year and a half documenting that stress test from the policyholder side.
According to Chen, over 70% of insured LA survivors reported delays, denials, or underpayments. The median gap between expected insurance payouts and actual rebuilding costs across Eaton and Palisades is $300,000. And the LA recovery is moving more slowly than any previous California wildfire on record — including the Camp Fire.
Chen is careful to frame this not as anti-industry argument but as a contract enforcement question. She also has a pointed challenge for catastrophe modelers specifically: her network has no visibility into the models that priced this risk, and she thinks that needs to change.
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