A new report from Fitch Ratings has suggested that global reinsurance pricing will soften further at the 2027 renewals, with terms and conditions offering cedants increasing flexibility as excess supply continues to outpace modest demand growth.
“The 2026 renewals demonstrated a strong shift to a buyers’ market, particularly for property risk, where rates declined by double digits,” Fitch observed.
Terms and conditions have marginally loosened, according to the rating agency, although attachment points and retentions have mostly held.
Fitch continued, “Casualty rates largely increased to keep pace with higher loss costs from social inflation, although rate adequacy could fall in 2027. Specialty pricing decreases were more modest, with select underwriting opportunities.”
With this in mind, the rating agency said it expects softening market conditions to persist through the January 2027 renewals, as competition intensifies amid continued macroeconomic, trade and geopolitical uncertainty.
“Nevertheless, the reduced pricing and somewhat easing of terms and conditions will still support a risk-adjusted ROE for reinsurers in the low-teens, above their cost of capital (8%–9%), as reinsurers maintain underwriting discipline and selectively allocate capital into profitable opportunities,” Fitch added.
The firm concluded, “Reinsurers faced challenging mid-year 2026 reinsurance renewals, as the favourable buyers’ market continued to push pricing lower, while terms and conditions weakened at the margin.
“Reinsurance supply remains robust and sufficient to meet somewhat increased demand, as some companies reinvest savings to purchase additional coverage.
“Exceptional profits since 2023 from solid underwriting profitability, higher investment income and equity market gains have increased industry capitalisation to record levels, providing a strong base for the sector to withstand rising claims costs.”
