Newsletter · 2026-08-09 · Ashutosh Agarwal

Europe's Insurers Say There Is More Catastrophe Capacity Than Demand - Insurance Pricing Turns - Week of August 9, 2026

For the week of August 3 to 9, 2026, the head of Europe's insurance trade body said on the record that a record wildfire year is still manageable and that there is much more supply than demand for catastrophe cover, while a Chicago broker quantified the hail and tornado losses now driving US primary property rate.

Insurance Pricing Turns

Week of August 9, 2026: Europe's Insurers Say There Is More Catastrophe Capacity Than Demand

This week the live signal spoke straight to the question at the heart of this letter: is the property market still soft? From Brussels, the head of Europe's insurance trade body and a run of European insurer CEOs said, in effect, yes, even in a record wildfire year, there is more capacity chasing catastrophe cover than there is demand for it. And from Chicago, a working property broker gave the clearest read in weeks on the peril that actually keeps primary property rates climbing in America: not hurricanes, but hail and tornadoes.

TL;DR

Europe's insurers say catastrophe capacity is abundant, not scarce. Thea Utoft Høj Jensen, Director General of Insurance Europe, told Bloomberg Talks that despite a record burn year, "the current level of wildfires is manageable for the sector," with "affordable insurance available across Europe", and, asked if this was a reset moment, said "the insurance industry has actually ample capacity... There's much more supply than there is demand" (Bloomberg Talks, Aug 7). That is a soft-market read, from the industry's own seat.
Severe storms, not hurricanes, are driving US primary property rate, and Illinois is exhibit A. A property broker said Illinois has logged "169 confirmed [tornado] touchdowns" halfway through 2026 versus a 54-a-year average, has moved to "number three in total claim activity in the United States," and that "insurance companies are already seeing rates going up because of all the wind and hail" (Straight Up Chicago Investor, Aug 4).

What's new

Europe's own industry says property capacity is overflowing, mid-record-wildfire-season. Bloomberg Talks, Insurance Europe's Thea Utoft Høj Jensen Talks Wildfire Risks, Aug 7, hosted by Stephen Carroll and Caroline Hepker with Thea Utoft Høj Jensen, Director General of Insurance Europe (the body that represents insurers at the EU level, operator/insider). Europe is having an ugly fire year, Jensen noted "a record number of burnt areas" across the continent, which would normally be the setup for a capacity crunch and rising prices. She said the opposite. On losses: "the current level of wildfires is manageable for the sector. It is something that is... you have affordable insurance available across Europe for these things. Because they're usually integrated in standard insurance policies. And they are, there is capacity to cover a lot of these things." And when the anchors asked whether this is "a major reset moment" that forces the industry to reprice, she pushed back directly: "That's not the indication I'm seeing now because the insurance industry has actually ample capacity to absorb also or to offer up even further. There's much more supply than there is demand."

That last line is the one that matters for this letter. "Much more supply than demand" is the plain-English definition of a soft market, too much money competing to write the same risk, which pushes prices down. It is delivered here by the European industry's own spokesperson in the middle of a bad-loss year. She hedged only on the long term, arguing affordability will need "joint responsibility for municipalities, for governments, but also for insurers" on prevention, a future problem, not a present pricing one.

Bloomberg framed the segment with clips from three European insurance chiefs speaking after their recent results, AXA's Tommy Baberl, Swiss Re's Anders Malmström and Zurich's Mario Greco. Two lines are worth keeping. The AXA executive on the new normal: "We have to live with the fact that these fires are happening more and more. This is part of climate change. This is part of our daily reality now... we work a lot now with different parties, with municipalities, with utility companies." And the Swiss Re executive on where this ends: "I would not say that it's uninsurable. I would say that the cost of this insurance might be higher over time and could reach levels that might not be interesting/convenient for the customers." Translation: capacity is fine today; the risk is that climate loss trend eventually outruns what buyers will pay, not that the market is short of money now.

The US property story is a hail-and-tornado story, and a broker just quantified it. Straight Up Chicago Investor, Different Scenarios That Require Builder's Risk Insurance With Josh Steigelmann, Aug 4, hosted by Tom Shallcross and Mark Ainley with Josh Steigelmann, a property & casualty insurance broker (operator/insider, though at the retail agent level, not a carrier's underwriting chief). Asked whether Illinois property insurance keeps climbing, Steigelmann laid out the driver in numbers: "It's going to continue to climb. And a lot of it has to do with the weather here in Illinois. Illinois has officially joined Tornado Alley. As of June 19th, we've had 169 confirmed touchdowns here in Illinois to lead the nation... up until this year, we averaged 54 touchdowns a year. We're triple that and we're halfway through the year. And insurance companies are already seeing rates going up because of all the wind and hail." He added that "Illinois has moved to number three in total claim activity in the United States. And at the beginning of the year, we're number two in wind and hail payout."

The more interesting part for anyone reading pricing power is how carriers are pushing that rate through, not just on the headline premium, but on terms. Steigelmann described two quiet tightenings. First, deductibles are being split out: "A lot of insurance companies now are doing wind and hail deductibles separate from the standard and it's typically double", meaning the customer eats a much bigger share of exactly the losses that are rising. Second, and sharper, carriers are switching roof coverage from full replacement to depreciated value without customers noticing: "A lot of insurance carriers have now started moving to automatically cover people for actual cash value on their roof and siding. They'll call it like a scheduled roof endorsement... it's 15 years old, 20 years old... so we're going to knock 50, 60, 70% off of the payout, then subtract your deductible from it." (Actual cash value means the insurer pays what the roof is worth today after wear-and-tear, not what a new one costs.) That is a real-time example of a primary market repricing a peril through deductibles and coverage terms, not just rate, the same terms-and-conditions discipline reinsurers spent the hard years installing, now flowing downstream to the homeowner.

The debate

There's a modest two-sided argument this week, and both halves were voiced in the same Bloomberg segment. The soft-now case dominated: Jensen's flat "much more supply than there is demand," and her insistence that a record wildfire year is still "manageable for the sector" with "ample capacity." The counter is not that the market is hard, but that it is living on borrowed time, the Swiss Re line that cover isn't "uninsurable" but "the cost of this insurance might be higher over time," and the AXA acknowledgment that these events are "happening more and more... part of our daily reality now." So the tension on the property cat side is now-versus-later, not soft-versus-hard: everyone on tape agrees capacity is abundant today; the disagreement is only about how long climate loss trend lets that last.

The names in play

Discussed on tape: Insurance Europe (the EU-level trade body); AXA, Swiss Re and Zurich via post-results clips of their CEOs, with Swiss Re standing in as the reinsurer voice of the week.

Read-throughs

Pure reinsurers. The clearest read-through in a while. If the head of Europe's insurance industry says there is "much more supply than there is demand" for catastrophe cover in the middle of a record fire season, that is consistent with, not a challenge to, the softening-property thesis this letter has carried since the spring. Swiss Re's own "capacity is fine, price may need to rise over time" framing points the same way: no scarcity today.
ILS and cat bonds. "Much more supply than demand" is exactly the environment that keeps alternative capital (the third-party money that backs cat bonds and sidecars) flowing in and keeps spreads grinding tighter. Nothing this week suggests the inflow has stalled.
Primary specialty and excess-and-surplus property. The Illinois broker's account is a live example of the peril that has kept US primary property rate sticky even as reinsurance softens, severe convective storm (the hail-and-tornado losses that don't make national headlines the way hurricanes do). The tightening he described, doubled wind and hail deductibles, roofs quietly shifted to depreciated-value payouts, is discipline holding at the primary level, and it rhymes with what the excess-and-surplus property writers have been saying about non-hurricane catastrophe.

What changed

Last week the whole letter was casualty: a $604M Texas verdict against freight broker C.H. Robinson, and an insurance buyer describing "50 percent of insurance and my costs up about 300 percent." This week the conversation swung back to property and climate, and we got an operator-grade confirmation of the core thesis. Insurance Europe's "much more supply than there is demand," said out loud in a record wildfire year, is the clearest on-tape endorsement of soft, capital-rich property conditions we've had since the June underwriter who admitted peak-peril rates were falling. It's a European voice rather than a Bermudian one, so we log it as corroborating evidence, not a US pricing print. The map is otherwise unchanged: property soft and capital-abundant, casualty hard, and US severe-storm losses keeping primary property rate sticky.