Insurance
Home›Insurance›Reinsurance›AM Best keeps stable outlook for global non-life reins…
AM Best keeps stable outlook for global non-life reinsurance
AM Best expects reinsurance segment capital to reach a new high at year-end 2026, totaling USD 575 billion in traditional capital plus USD 130 billion in alternative capital.
AM Best maintained a stable outlook on the global non-life reinsurance segment, calling the market fundamentally strong even as property reinsurance rates soften and some casualty lines face pressure in the United States, according to the rating agency’s assessment. AM Best had revised the reinsurance sector outlook to stable from positive in January, pointing to accelerated softening in property reinsurance rates. Ahead of the annual reinsurance industry meeting in Monte Carlo this week, it reiterated the stable view and attributed it to factors including a pricing environment still supportive of solid operating results, strong nominal and risk-adjusted capital positions, sustained underwriting performance in property cat covers, and higher interest rates that bolster investment income for reinsurers. The agency said the property reinsurance pricing cycle has moved past its peak following the hard market reset in 2023, but reinsurers have largely maintained underwriting discipline through higher attachment points and tighter terms and conditions. While projected margins are narrower than the very strong returns seen over the past few years, AM Best said property exposures continue to be priced above technical adequacy levels in aggregate. Outside property, AM Best noted that certain casualty classes in the US remain affected by an unfavorable legal and regulatory environment, with systemic legal abuse risks and related inflationary pressures expected to persist. As a result, it said reinsurer appetite for casualty business might be constrained, and it also flagged catastrophe activity as a key driver, noting six consecutive years of global insured natural catastrophe losses above USD 100 billion. AM Best estimated segment capital is expected to hit a new high at year-end 2026, made up of USD 575 billion in traditional capital and USD 130 billion in alternative capital, with third-party capital supported by record cat bond issuance in the first half of the year.