Reinsurance buyers expect property prices to continue declining into 2027, as abundant traditional reinsurance capacity and fewer severe catastrophe losses drive continued competition, according to Moody’s Ratings.
In its annual survey of reinsurance buyers, Moody’s noted that market conditions remain favourable for reinsurance buyers heading into 2027.
Within property, while terms and conditions have remained relatively stable in 2026, about a quarter of respondents expect a decline in attachment points, which could signal some easing of terms and conditions in 2027. Buyers are also increasingly looking to expand coverage, with growing interest in tail protection and aggregate covers.
Meanwhile, pricing trends for casualty remain more mixed, differing by region. US insurers generally expect price increases due to high loss cost trends, driven by litigation and higher settlement costs. Non-US insurers increasingly expect price declines, as abundant reinsurance capacity spills over from the property market.
Moody’s highlighted that catastrophe bonds and collateralised reinsurance remain the most attractive forms of alternative capital.
Interest in alternative capital is growing, despite reinsurance market conditions becoming more competitive. Insurers are using insurance-linked securities (ILS) alongside traditional reinsurance to diversify sources of capacity, secure multiyear protection and enhance capital management. Catastrophe bonds remain the favoured alternative capital product among respondents, followed closely by collateralised reinsurance. Sidecars and ILS funds are attracting more limited interest.
Moody’s added that cyber reinsurance demand remains healthy. Most respondents expect to maintain their current level of reinsurance protection, while more than a quarter plan to purchase additional coverage.
Most respondents do not expect the accelerated use of artificial intelligence (AI) to materially influence cyber reinsurance purchasing decisions in 2027. Moody’s believes AI risks will become a more significant consideration for this line.
