Overview
Bermuda-based reinsurers reported stronger underwriting profitability in the first half of 2026, supported by lower catastrophe losses and favorable reserve development. According to Fitch Ratings, seven major Bermuda insurance and reinsurance companies recorded a combined ratio of 85.3%, compared with 90% for full-year 2025. All seven companies generated underwriting profits during the period.
The improvement came despite increasingly competitive conditions across global reinsurance markets. Abundant underwriting capacity continues to put downward pressure on pricing, with softer policy terms emerging across several business lines.
Fitch expects global reinsurers to maintain favorable returns throughout 2026, although further price reductions threaten premium growth. The US property and casualty insurance sector faces a somewhat different outlook.
For Bermuda-based reinsurers, underwriting results are expected to deteriorate in 2025 as premium rates are pressured and loss costs increase, although strong returns should continue as capital remains robust. Combined ratio to reach 90% in 2024, driven by higher catastrophe losses and softening premium rates.
Key highlights
- Bermuda (re)insurers reported an 85.3% combined ratio, improving from 90% in 2025. All companies generated underwriting profits, supported by lower catastrophe losses and favorable prior-year reserve development.
- Catastrophe losses contributed 2.8 percentage points to the combined ratio, compared with 6.7 points in 2025. The 2026 figure included losses associated with the Iran conflict, for which industry insured losses were estimated at $3 bn. Excluding catastrophes, the accident-year combined ratio remained unchanged at 85.5%.
- Net income return on equity (ROE) reached 15.7%, down from 18.6% in 2025. Reserve releases reduced the combined ratio by 3.0 percentage points, compared with 2.2 points in 2025. RenaissanceRe reported the strongest favorable reserve development at 8.2 points.
- Net premiums written declined 9% across Fitch’s Bermuda (re)insurance group, with four of seven companies reporting lower volumes. Competitive pricing, reduced exposures and non-renewals contributed to the contraction. Hamilton Insurance Group bucked the trend with 10% premium growth.
- Shareholders’ equity remained broadly unchanged despite strong earnings. Higher shareholder distributions and unrealized fixed-income losses absorbed much of the benefit from underwriting and investment results. Fitch expects favorable underwriting returns to continue in 2026, although pricing competition and U.S. casualty reserve uncertainty remain concerns.
Fitch anticipates relatively stable operating conditions, accompanied by slightly lower underwriting profits and net earnings as insurers contend with slower revenue growth.
Large Bermudian reinsurers and the four major European reinsurance groups reported a 19.9% return on equity during the first half of 2026, according to Gallagher Re.
The sector has enough earnings capacity to absorb an insured loss event of $50 bn to $75 bn, on top of normal natural catastrophe losses during the second half, and still earn its cost of equity for the year.
Gallagher Re described the 19.9% reported ROE as the second-highest first-half result of the past decade. Lower-than-normal natural catastrophe losses contributed 3.4 percentage points to that result.
Bermuda (re)insurance financial performance
| Financial indicator | 2026 | 2025 | Assessment |
| Combined ratio | 85.3% | 90.0% | Improved 4.7 pp |
| Catastrophe loss contribution | 2.8 pp | 6.7 pp | Reduced 3.9 pp |
| Accident-year combined ratio excluding catastrophes | 85.5% | 85.5% | Unchanged |
| Net income ROE | 15.7% | 18.6% | Down 2.9 pp |
| Favorable reserve development | 3.0 pp | 2.2 pp | Improved 0.8 pp |
| Net premiums written growth | -9% | – | 1H26 contraction |
| Shareholders’ equity movement | Broadly flat | – | Earnings offset by capital distributions and investment losses |
Reinsurance buyers expect property pricing to fall further at the January 2027 renewals, with double-digit reductions increasingly entering negotiations, according to Moody’s annual survey.
Casualty looks less settled. Persistent loss-cost pressure, especially across U.S. liability business, has divided buyers over the direction of pricing. Moody’s survey found market conditions remain favorable for buyers heading into 2027.
For property reinsurance, 86% of respondents expect prices to decline again in 2027. That compares with 74% in Moody’s 2025 survey.
Life reinsurers based in Bermuda have recorded increased activity as annuity sales rise in the U.S. and recent regulatory changes in Japan simplify cross-border business, according to AM Best.
Despite the year-over-year decline, these products accounted for nearly 38% of the overall market and continue to contribute significantly to industry growth. Sales rose 35% compared to the fourth quarter, primarily due to strong performance in March.
Bermuda and the Cayman Islands have gained traction due to their regulatory stability and availability of professional services. Cayman reinsurers, according to the report, insure predominantly North American risks, with 90% of exposure based in that region.
Japanese insurers have sought reinsurance partnerships due to limited domestic investment options. With Japanese carriers largely restricted to government bonds, partnering with offshore reinsurers like those in Bermuda allows access to higher-yield credit markets, enabling more competitive annuity offerings.
Lower catastrophe losses support Bermuda reinsurers’ profitability
Catastrophe losses added 2.8 percentage points to the Bermuda group’s combined ratio in 2026, down from 6.7 percentage points during 2025. Reinsurance buyers expect property pricing to fall further at the January 2027 renewals, with double-digit reductions increasingly entering negotiations.
The figure included losses associated with the Iran conflict, for which industrywide insured losses were estimated at $3 bn. California wildfires accounted for much of the elevated catastrophe activity recorded in 2025.
Underlying underwriting performance remained steady. The accident-year combined ratio excluding catastrophe losses stood at 85.5% in both periods, suggesting the improvement in reported profitability was largely attributable to reduced catastrophe claims rather than changes in underlying underwriting margins.
Catastrophe losses and market conditions
| Reinsurance Market development | Reported figure | Significance for reinsurers |
| Iran conflict insured losses | $3 bn | Contributed to 1H26 catastrophe claims |
| Baltimore Bridge industry losses, revised | $2.8 bn | Increased prior-event loss estimates |
| Baltimore Bridge earlier loss estimate | $1.5 bn | Shows the scale of upward revisions |
| Bermuda group NPW contraction | 9% | Indicates pressure on premium volumes |
| Companies reporting lower NPW | 4 of 7 | Premium contraction affected most of the peer group |
| Companies reporting underwriting profits | 7 of 7 | Profitability remained positive across the group |
The group’s net income return on equity reached 15.7%, compared with 18.6% for full-year 2025. Although returns declined, profitability remained strong relative to the pressures affecting reinsurance pricing.
Reserve releases improve underwriting results
Favorable prior-year reserve development contributed another 3.0 percentage points to the group’s combined ratio during 2026, compared with 2.2 percentage points in 2025. Property and specialty insurance portfolios accounted for much of the improvement.
Hamilton Insurance Group was the only company among the seven to report adverse reserve development, which increased its combined ratio by 1.4 percentage points.
Additional claims related to the Baltimore Bridge collapse affected Hamilton and other insurers. Estimated industry losses from the incident increased to $2.8 bn from an earlier estimate of $1.5bn, adding pressure to previously established claims reserves.
RenaissanceRe Holdings reported the strongest favorable reserve development, equivalent to 8.2 percentage points. Its results benefited from lower estimated claims costs associated with earlier property catastrophe events.
Fitch expects favorable reserve development to continue through 2026 and 2027. The US casualty market remains an area of concern, given uncertainty surrounding claims costs and reserve adequacy.
Company-level underwriting and capital developments
| Company | Reported performance | Main driver |
| RenaissanceRe Holdings | 8.2 pp favorable reserve development | Reduced estimates for prior property catastrophe losses |
| Hamilton Insurance Group | 10% NPW growth | Expansion in casualty reinsurance and specialty insurance |
| Hamilton Insurance Group | 1.4 pp adverse reserve development | Additional claims pressure, including Baltimore Bridge losses |
| SiriusPoint | 8% shareholders’ equity decline | Redemption of preference shares |
| Arch Capital Group | Shareholders’ equity decline below 1% | Increased common share repurchases |
| Everest Group | Shareholders’ equity decline below 1% | Increased common share repurchases |
| Remaining companies in Fitch’s group | Shareholders’ equity increases of 1%–2% | Earnings and investment performance |
Bermuda reinsurance premiums decline 9% amid pricing pressure
Net premiums written across the seven Bermuda insurers declined 9% during 2026, with four companies reporting lower premium volumes.
The contraction followed reductions in insurance pricing and insured exposures, alongside decisions not to renew certain contracts in an increasingly competitive market.
Another factor was the absence of reinstatement premiums associated with the California wildfires. These payments had contributed to premium volumes during 2025, and new business opportunities only partially compensated for their absence.
Hamilton Insurance Group moved against the wider trend, reporting 10% growth in net premiums written. Expansion in casualty reinsurance and specialty insurance supported its performance.
Fitch expects competition to continue restricting premium growth across the Bermuda reinsurance market. Underwriters are nevertheless expected to maintain pricing discipline as capacity remains plentiful and buyers seek more favorable renewal terms.
Shareholder capital remains stable despite higher distributions
Shareholders’ equity across the Bermuda reinsurance group was broadly unchanged in 2026.
Underwriting profits, investment income and gains in equity markets supported capital positions. Those contributions were offset by increased distributions to shareholders and unrealized losses on fixed-income investments following higher interest rates.
SiriusPoint recorded the largest reduction in shareholders’ equity, declining 8% following the redemption of preference shares.
Arch Capital Group and Everest Group each reported equity declines of less than 1%. Both companies substantially increased common share repurchases, returning more capital to investors despite strong operating earnings.
The remaining Bermuda insurers recorded modest increases in shareholders’ equity, ranging from 1% to 2%.
The results indicate Bermuda reinsurers entered the second half of 2026 with profitable underwriting operations and broadly stable capital positions. Lower catastrophe losses have supported earnings, but declining premium volumes and increasingly competitive reinsurance pricing remain concerns for future profitability.
According to Beinsure, reinsurance industry is showing strong momentum. Fund and Insure domain as the big opportunity – potentially generating $17 tn in gross value by 2035. Global premiums climbed 8.6% to €7 tn, the sharpest annual rise since before the financial crisis, according to Allianz. Growth cut across life, non-life, and health segments. Beinsure highlighted key points and trends.
1. How profitable were Bermuda reinsurers in the first half of 2026?
Fitch Ratings reported an 85.3% combined ratio for its group of seven Bermuda (re)insurers in 1H26, compared with 90.0% in 2025. Every company generated an underwriting profit. Net income ROE reached 15.7%, compared with 18.6% in 2025, indicating strong profitability even as returns moderated.
Why did Bermuda (re)insurance combined ratios improve?
Lower catastrophe losses accounted for much of the improvement. Catastrophes added 2.8 percentage points to the combined ratio in 2026, compared with 6.7 points in 2025, when California wildfires affected results. Favorable reserve development provided additional support. The accident-year combined ratio excluding catastrophe losses stayed at 85.5%, indicating little change in underlying underwriting performance.
How did the Iran conflict affect reinsurance results?
The Iran conflict contributed to insured catastrophe losses during 2026, with industry losses estimated at $3 bn. These claims formed part of the 2.8 percentage-point catastrophe contribution reported by Fitch’s Bermuda peer group. The effect was included in an otherwise profitable underwriting period.
What happened to reserve development among Bermuda reinsurers?
Reserve releases improved the group combined ratio by 3.0 percentage points in 2026, up from 2.2 points in 2025. Property and specialty insurance were the primary contributors. RenaissanceRe recorded 8.2 points of favorable development, whereas Hamilton Insurance Group reported 1.4 points of adverse development. Revised losses from the Baltimore Bridge collapse increased industry estimates to $2.8 bn.
Why did Bermuda reinsurance premiums decline despite strong profitability?
Net premiums written fell 9% as competitive conditions placed pressure on reinsurance pricing and contract terms. Insurers and reinsurers also reduced certain exposures or declined renewals. The absence of reinstatement premiums associated with California wildfire claims in 1H25 added to the contraction. Hamilton Insurance Group was an exception, increasing NPW by 10% through growth in casualty reinsurance and specialty insurance.
How did shareholder distributions affect Bermuda reinsurers’ capital positions?
Aggregate shareholders’ equity remained approximately flat during 1H26. Underwriting profits, investment income and equity market gains supported capital generation, but larger shareholder distributions and unrealized fixed-income losses offset those gains. SiriusPoint recorded an 8% equity decline following preference share redemption. Arch Capital and Everest each reported decreases below 1%, alongside increased share repurchases.
What is Fitch Ratings’ outlook for Bermuda reinsurance in 2026 and 2027?
Fitch expects reinsurers to maintain favorable returns through 2026 despite abundant capacity and increasing price competition. Premium growth faces continued pressure as rates decline across many reinsurance lines and contract terms loosen. Favorable reserve development is expected to continue during 2026 and 2027, although U.S. casualty exposures remain an area of concern. The broader U.S. property and casualty insurance sector is expected to remain relatively stable, with slightly lower underwriting profits and net earnings.
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AUTHOR: Yana Keller – Re/Insurance Editor at Beinsure Media
