60% of respondents to a recent Fitch Ratings survey expect further price falls in the property cat reinsurance segment at the 2027 renewals, though most think price declines will not exceed 10%, suggesting a more moderate pace of decline than in previous renewals.
The rating agency’s new survey included reinsurance market participants and took place at the market’s annual gathering, the 68th Rendez-Vous de Septembre, in Monte Carlo.
“The prospect of further, albeit less pronounced, price declines as capital supply outpaces demand is reflected in our ‘deteriorating’ 2027 sector outlook for global reinsurance,” Fitch observed.
“We do not expect property and casualty (P&C) margin and revenue erosion to materially affect the sector’s very strong capital position. Rising capitalisation buffers and strengthened reserve adequacy provide a solid base for the sector to maintain strong credit fundamentals, and the vast majority (88%) of Fitch-rated global reinsurance groups are on Stable Outlooks. Nevertheless, intelligent cycle management, and navigating the trade-off between growth and profitability at renewals, will increasingly differentiate individual reinsurer performance,” Fitch observed.
The survey also flagged several other key trends. Most notably, 86% of respondents expect terms and conditions to loosen in 2027, with more than half predicting this loosening will be selective rather than broad-based.
This aligns with Fitch’s own view that persistent excess capital in the P&C sector will keep driving competition among reinsurers, but that this competition will increasingly play out through terms and conditions rather than price, for instance via lower attachment points or broader event definitions.
Meanwhile, reinsurance market participants are said to favour life and health (L&H) over the softer P&C segment when it comes to capital allocation.
Over 90% of respondents ranked L&H, financial solutions, or specialty as their top priority for capital allocation, while fewer than 10% chose property and property cat.
L&H, led by longevity, ranked highest for 42% of the 93 reinsurers, insurers, brokers and other market participants surveyed. Financial solutions was next at 28%, followed by specialty at 21%. Just 8% selected property and property cat, and only 1% chose US casualty.
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