Insurance
Home›Insurance›Reinsurance›AM Best expects rising competitive pressure in reinsur…
AM Best expects rising competitive pressure in reinsurance in 2027
AM Best said competitive pressures should intensify in 2027 as reinsurers keep building capital, even while underwriting results normalize through the rest of 2026 absent major catastrophe losses.
AM Best expects reinsurance underwriting results to keep normalizing through the rest of 2026, provided major catastrophe losses do not hit, but it projects tougher competition for reinsurers next year as the sector continues to grow its capital base, Artemis reported.
The rating agency said discipline remains a focus for the top 50 global reinsurers, helping support profitability even as the market softens. It pointed to the industry’s shift after the peak of the recent hard market, when reinsurers restored profitability through higher hard market rates and tighter underwriting practices.
AM Best said resilience of those changes was tested by the California wildfires in early 2025. It added that, while property catastrophe reinsurance rates have softened since, the persistence of terms and conditions enforced during the hard market is part of why it believes reinsurers can sustain profits again in 2026.
Discussing mid-year 2026 renewals, AM Best noted continued downward pressure on rates and increased leverage for cedents in June and July, while reinsurers maintained enough capital to absorb losses. It also highlighted rising severe weather losses in the United States and wildfire activity, and estimated reinsurance capital would reach $705 billion by the end of the year, with about $130 billion from third-party and insurance-linked securities capital.