Global Reinsurance Market: Underwriting Profitability Improved on Lower Catastrophes
Beinsure expects the U.S. property and casualty insurance sector to remain relatively stable in 2026 and achieve slightly lower underwriting profits and net earnings, driven by continued strong performance despite headwinds that challenge top-line growth.
These sectors include the Bermuda market reinsurers. Bermuda reinsurers expected improved underwriting performance in 2026 will be driven by accelerating premium rates with a market reset in pricing, terms and conditions, even amid heightened catastrophe losses, inflation and economic uncertainties, according Beinsure.
More than 40 years ago, the country emerged as the leader in the development and regulation of captive insurers; today it is the home of underwriting operations for more than 30 major international insurance and reinsurance firms.
Bermuda Reinsurance Market has grown up in the last 20 years in response to market needs for greater worldwide access to property and casualty insurance and reinsurance.
These large carriers are regulated under a separate and distinct set of requirements with a regulatory framework designed to meet international regulatory standards commensurate with their size and market scope.
Global reinsurance pricing softened more than many market participants expected at the Jan. 1, 2026 renewals, according to Moody’s Ratings.
Moody’s said property catastrophe pricing landed slightly lower than anticipated. Insured natural catastrophe losses still cleared $100 bn globally in 2025, yet the loss mix mattered.
Global reinsurance dedicated capital totaled $769 bn at full-year 2024, a rise of 5.4% versus the restated full-year 2023 base. Reinsurance capital reached a record high at 2025 with about 8% growth in traditional capital to $710 bn while alternative capital grew by approximately 12% to $128 bn.
According to Beinsure, reinsurance industry is showing strong momentum. Fund and Insure domain as the big opportunity — potentially generating $17 tn in gross value by 2035. Global premiums climbed 8.6% to €7 tn, the sharpest annual rise since before the financial crisis, according to Allianz. Growth cut across life, non-life, and health segments. Beinsure highlighted key points and trends.
Reinsurers matched the upswing, reporting combined ratios of 86.8% alongside average returns on equity of 17%, a level comfortably above funding costs, according to Gallagher Re.
But the surface numbers hide strains. Systemic shocks have exposed weaknesses that still run through the market.
Underwriting Profitability Improved on Lower Catastrophes
Fitch’s group of seven Bermuda (re)insurers reported an exceptional 85.3% combined ratio in 1H 2026, with every company posting an underwriting profit.
The result included 2.8 percentage points of catastrophe losses, including losses tied to the Iran conflict. Fitch put related industry insured losses at about $3 bn.
That performance compared with a 90% combined ratio in 2025, when catastrophe losses reached 6.7 percentage points, largely due to the California wildfires. The accident-year combined ratio excluding catastrophes stayed at 85.5% in both 1H 2026 and 2025.
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Net income return on equity remained high at 15.7% in 1H 2026, down from 18.6% in 2025. Still a strong number, given the softer pricing backdrop.
Fitch Ratings has changed its outlook for the global reinsurance sector from “improving” to “neutral,” noting that the pricing cycle has likely peaked. However, profitability is expected to stay strong by historical standards through 2025.
Global reinsurance market delivered strong results in 2024 with further improvement in underwriting profitability, exceptional ROEs and a continued building of capital. Reinsurer capital buffers and reserve levels have improved, supported by record profits in 2023 and the first half of 2024.
Reinsurers are well-prepared for price declines, despite rising claims costs and increasing catastrophe losses driven by climate change.
Favorable Reserve Development Continues
Reserve releases continued to help Bermuda (re)insurers’ underwriting results. They improved the group’s combined ratio by 3 percentage points in 1H 2026, driven by property and specialty lines, compared with 2.2 percentage points in 2025.
- Hamilton Insurance Group was the only company in the group with overall adverse reserve development in 1H 2026, at 1.4 percentage points. Hamilton and other companies booked additional losses from the Baltimore Bridge collapse, as Fitch said industry losses rose to $2.8 bn from $1.5 bn.
- RenaissanceRe Holdings reported the strongest favorable reserve development at 8.2 percentage points, helped by reduced losses on prior property catastrophe events.
Fitch expects reserve development to remain favorable through 2026 and 2027, although some pressure points remain. U.S. casualty sits near the top of that list.
Premium Growth Negative in Softening Market Environment
Net premiums written for the group fell 9% in 1H 2026. Four of the seven companies reported lower volumes.
The decline reflected pricing and exposure reductions, non-renewals in a more competitive (re)insurance market, and the absence of reinstatement premiums from the California wildfires in 1H 2025. New opportunities offset only part of that drop.
Hamilton went the other way. Its net premiums written rose 10%, driven by growth in casualty (re)insurance and specialty insurance.
Fitch expects net premium growth across the group to remain constrained by competition. Even so, the market should retain underwriting discipline, rather than chase weak pricing for volume.
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FULL report — https://beinsure.com/global-reinsurance-faces-price-erosion/
