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Fitch expects reinsurance pricing to soften further at 2027 renewals
Fitch said 2026 property renewals saw double digit rate declines, and it expects competition to keep 2027 conditions in a buyers market through January.
Fitch Ratings expects global reinsurance pricing to soften further at the 2027 renewals, pointing to excess industry supply that continues to outpace modest demand growth. The rating agency also expects terms and conditions to offer cedants “increasing flexibility,” as competition intensifies amid ongoing macroeconomic, trade and geopolitical uncertainty, according to Reinsurance News.
In its view, the 2026 renewals already marked a shift to a buyers market, particularly for property risk, where rates declined by double digits. Fitch said terms and conditions have loosened only marginally since then, with attachment points and retentions largely holding.
Fitch added that casualty rates largely increased to keep pace with higher loss costs from social inflation, while rate adequacy could fall in 2027. It also forecast that specialty pricing decreases would be more modest, with select underwriting opportunities.
Despite weaker pricing and somewhat easing terms, Fitch said the combination should still support reinsurers’ risk adjusted return on equity in the low teens, above their cost of capital, assuming reinsurers maintain underwriting discipline and selectively allocate capital into profitable opportunities. The agency concluded that reinsurance supply remains robust and sufficient to meet somewhat increased demand, as some cedants reinvest savings to buy additional coverage.