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Lloyd’s reinsurance rates soften further into 2026, AM Best warns
AM Best expects pricing to remain adequate through at least end-2026, but profitability will hinge on remaining 2026 catastrophe experience, including potential Middle East losses.
AM Best says Lloyd’s reinsurance is entering a more challenging pricing environment in 2026, with the biggest softening seen in property catastrophe business and in risk-adjusted pricing across most lines during the first half of the year. The rating agency also flagged pressure on terms and conditions, even as rates have moved down from a very strong peak.
AM Best noted that reinsurance remains Lloyd’s largest segment, accounting for about one-third of the market’s gross written premium. Lloyd’s reinsurance generated £20 billion of inwards reinsurance premium in 2025, after growing at a five-year compound annual rate of 7% from 2021 to 2025, before softening intensified in 2026.
Despite the deterioration, AM Best said rates are expected to remain adequate through at least the end of 2026, but warned the segment’s profitability will depend on catastrophe experience for the rest of the year, with the hurricane season still ahead. The rating agency also cited risk from a prolonged Middle East crisis, which could drive further losses given Lloyd’s role in the region and its position in marine war-risk cover.
AM Best added that Lloyd’s continues to attract capital in the softer market, citing new syndicates and growing deployment of third-party capital through its London Bridge risk transformation platform. The platform reached around $3 billion of capital deployment by the end of 2025, supported by transactions including catastrophe bonds and reinsurance captives, according to Reinsurance News.