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S&P keeps stable outlook for global reinsurance despite pricing pressure

S&P forecasts global reinsurance ROE of 12% to 15% in 2026 and 10% to 13% in 2027, with combined ratios staying below 100%.

Reported · Written up by our desk · Reinsurance

S&P Global Ratings is maintaining a stable outlook for the global reinsurance sector even as it expects pricing to soften further in 2027, citing ample capacity from both traditional reinsurers and alternative capital providers.

According to Reinsurance News, S&P points to portfolio ratings strength, with the average rating in its reinsurance benchmark group at the upper end of the A category and 85% of companies showing a stable outlook. The agency also expects rating trends to support its sector view as underwriting and investment performance help offset tougher near-term market conditions.

S&P expects reinsurance profitability to remain sufficient to cover the sector cost of capital, supported by still-healthy property and casualty combined ratios, solid net investment income, and strong life reinsurance earnings, as long as catastrophe losses and large man-made losses stay within annual budgets, Reinsurance News reports.

The rating agency forecasts a 2026 return on equity of 12% to 15%, falling to 10% to 13% in 2027, and an undiscounted combined ratio range of 92% to 95% in 2026 and 94% to 97% in 2027. S&P also projects positive reserve releases of 1% to 2% percentage points and a net investment yield of 3.5% to 4.0%.

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