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Fitch: Most reinsurers expect property cat rates to keep falling

In a Fitch survey, 58% of respondents expected reinsurance terms and conditions to loosen selectively at 2027 renewals, and 60% projected further declines in property catastrophe pricing, with 20% calling for drops of more than 10%.

Reported · Written up by our desk · Reinsurance

Reinsurers are entering renewal negotiations with strong capital, but a majority expect a challenging reinsurance market outcome, including lower prices and loosening terms, according to a Fitch Ratings survey conducted during the annual Monte Carlo Rendez-vous event.

Fitch found that underwriting focus is shifting away from property and property catastrophe risks, with fewer than 10% of respondents saying those lines are a high priority for capital allocation. Life and health was cited as the highest priority, followed by financial solutions, specialty, then property and property catastrophe, while US and international casualty were each deemed high priority for capital deployment in 2027 by just 1% of respondents.

The survey also pointed to continued softening at the 2027 renewals. Overall, 58% of respondents expected terms and conditions to loosen selectively, 28% expected broad loosening, and 14% expected no change, while 60% expected pricing to decline further in property catastrophe, including 20% forecasting declines of more than 10%.

Fitch said it is not overly concerned about reinsurers’ positions, noting that it does not expect P and C margin and revenue erosion to materially affect the sector’s strong capital base. The rating agency added that 88% of Fitch-rated global reinsurance groups are on Stable Outlooks, supported by rising capitalization buffers and strengthened reserve adequacy.

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