Fitch Ratings has reported that the 19 non-life reinsurers it tracks saw a decline in underwriting profits in H1 2025, and noted that premium growth in 2026 may be constrained by heightened competition and ongoing global economic uncertainties.
It will come as no surprise to readers that the largest loss event by far was the California wildfires, with non-US natural catastrophe losses relatively limited.
However, results in H1 2025 also suffered from several aviation losses, including the Air India crash in June and the American Airlines Washington collision in January.
With all this in mind, Fitch expects underlying underwriting results to deteriorate into 2026, although pricing should remain adequate to support favourable returns.
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At the same time, Non-life reinsurance net premiums reportedly fell slightly in H1 2025 from H1 2024, reflecting softening market conditions across many lines.
“Premium growth is likely to be challenging in 2026 amid an increasingly competitive market and global economic uncertainties,” Fitch added.
Elsewhere in the report, the rating agency said that it expects softening market conditions to persist at the January 2026 renewals.
As per Fitch, reinsurers will continue to deploy capital into profitable opportunities, resulting in added pricing pressure.
“However, market conditions will stay supportive of favourable risk-adjusted returns for reinsurers, albeit reduced from peak returns following the market reset in pricing and terms and conditions in 2023, as capacity maintains its underwriting discipline,” the rating agency observed.
Fitch explained that rates continued to soften at the mid-year 2025 reinsurance renewals, particularly for loss-free business, with differentiation by client based on performance.
The firm continued, “Many reinsurers hoped for a halt to property pricing declines given high catastrophe losses incurred in H1 2025, particularly from the California wildfires. However, reinsurance supply remains robust and sufficient to meet increased demand.
“Exceptional profitability in 2023, 2024 and H1 2025 from higher investment income, equity market gains, and the best underwriting conditions in decades increased industry capitalisation to record levels, providing a strong base for the sector to withstand rising claims costs.
“At the same time, global demand for reinsurance remains strong as primary insurers purchase additional limits from increasing insured values and exposure growth and contend with higher risk, including from catastrophes, climate change and casualty costs, and uncertainty in economic, trade and geopolitical conditions.”
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