Overview
Fitch Ratings views the global reinsurance sector as challenging, with abundant capacity and intense competition leading to price erosion across most reinsurance lines and looser policy terms and conditions, although reinsurers are expected to maintain favorable returns in 2026.
Fitch expects the U.S. property and casualty insurance sector to remain relatively stable in 2026 and achieve slightly lower underwriting profits and net earnings, driven by continued strong performance despite headwinds that challenge top-line growth.
These sectors include the Bermuda market reinsurers. Bermuda reinsurers expected improved underwriting performance in 2026 will be driven by accelerating premium rates with a market reset in pricing, terms and conditions, even amid heightened catastrophe losses, inflation and economic uncertainties, according Fitch Ratings.
More than 40 years ago, the country emerged as the leader in the development and regulation of captive insurers; today it is the home of underwriting operations for more than 30 major international insurance and reinsurance firms.
Bermuda Reinsurance Market has grown up in the last 20 years in response to market needs for greater worldwide access to property and casualty insurance and reinsurance.
These large carriers are regulated under a separate and distinct set of requirements with a regulatory framework designed to meet international regulatory standards commensurate with their size and market scope.
5 Key Highlights
- Fitch’s group of seven Bermuda (re)insurers reported an 85.3% combined ratio in 1H26, with every company generating underwriting profit.
- Catastrophe losses added 2.8 percentage points to the group’s combined ratio in 1H 2026, down from 6.7 percentage points in 2025.
- The accident-year combined ratio excluding catastrophes stayed flat at 85.5% in both 1H 2026 and 2025.
- Net premiums written fell 9% in 1H 2026 as pricing pressure, exposure cuts and non-renewals weighed on growth.
- Reserve releases improved the combined ratio by 3 percentage points, led by property and specialty lines.
Global reinsurance pricing softened more than many market participants expected at the Jan. 1, 2026 renewals, according to Moody’s Ratings.
Moody’s said property catastrophe pricing landed slightly lower than anticipated. Insured natural catastrophe losses still cleared $100 bn globally in 2025, yet the loss mix mattered.
Global reinsurance dedicated capital totaled $769 bn at full-year 2024, a rise of 5.4% versus the restated full-year 2023 base. Reinsurance capital reached a record high at 2025 with about 8% growth in traditional capital to $710 bn while alternative capital grew by approximately 12% to $128 bn.
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.
Reinsurers matched the upswing, reporting combined ratios of 86.8% alongside average returns on equity of 17%, a level comfortably above funding costs, according to Gallagher Re.
But the surface numbers hide strains. Systemic shocks have exposed weaknesses that still run through the market.
Underwriting Profitability Improved on Lower Catastrophes
Fitch’s group of seven Bermuda (re)insurers reported an exceptional 85.3% combined ratio in 1H 2026, with every company posting an underwriting profit.
The result included 2.8 percentage points of catastrophe losses, including losses tied to the Iran conflict. Fitch put related industry insured losses at about $3 bn.
That performance compared with a 90% combined ratio in 2025, when catastrophe losses reached 6.7 percentage points, largely due to the California wildfires. The accident-year combined ratio excluding catastrophes stayed at 85.5% in both 1H 2026 and 2025.
Net income return on equity remained high at 15.7% in 1H 2026, down from 18.6% in 2025. Still a strong number, given the softer pricing backdrop.
| Global reinsurance views | Fitch Ratings views global reinsurance as challenging in 2026, as abundant capacity and intense competition push pricing lower across most reinsurance lines. |
| Reinsurance angle | The agency expects looser policy terms and conditions to add pressure, although reinsurers should still produce favorable returns. |
| U.S. P&C angle | Fitch expects the U.S. property/casualty insurance sector to remain relatively stable in 2026. |
Fitch Ratings has changed its outlook for the global reinsurance sector from “improving” to “neutral,” noting that the pricing cycle has likely peaked. However, profitability is expected to stay strong by historical standards through 2025.
Global reinsurance market delivered strong results in 2024 with further improvement in underwriting profitability, exceptional ROEs and a continued building of capital. Reinsurer capital buffers and reserve levels have improved, supported by record profits in 2023 and the first half of 2024.
Reinsurers are well-prepared for price declines, despite rising claims costs and increasing catastrophe losses driven by climate change.
Favorable Reserve Development Continues
Reserve releases continued to help Bermuda (re)insurers’ underwriting results. They improved the group’s combined ratio by 3 percentage points in 1H 2026, driven by property and specialty lines, compared with 2.2 percentage points in 2025.
- Hamilton Insurance Group was the only company in the group with overall adverse reserve development in 1H 2026, at 1.4 percentage points. Hamilton and other companies booked additional losses from the Baltimore Bridge collapse, as Fitch said industry losses rose to $2.8 bn from $1.5 bn.
- RenaissanceRe Holdings reported the strongest favorable reserve development at 8.2 percentage points, helped by reduced losses on prior property catastrophe events.
Fitch expects reserve development to remain favorable through 2026 and 2027, although some pressure points remain. U.S. casualty sits near the top of that list.
Reinsurance Sector Comparison
| Sector | Main pressure | 2026 earnings view | Market position |
| Global reinsurance | Abundant capacity and intense competition | Favorable returns expected | Pricing weakens across most lines |
| U.S. P&C insurance | Slower top-line growth | Slightly lower underwriting profits and net earnings | Strong performance continues |
| Bermuda (re)insurers | Softening reinsurance market and casualty reserve risk | Strong underwriting still supports returns | Exposed to global reinsurance and U.S. P&C trends |
Premium Growth Negative in Softening Market Environment
Net premiums written for the group fell 9% in 1H 2026. Four of the seven companies reported lower volumes.
The decline reflected pricing and exposure reductions, non-renewals in a more competitive (re)insurance market, and the absence of reinstatement premiums from the California wildfires in 1H 2025. New opportunities offset only part of that drop.
Hamilton went the other way. Its net premiums written rose 10%, driven by growth in casualty (re)insurance and specialty insurance.
Fitch expects net premium growth across the group to remain constrained by competition. Even so, the market should retain underwriting discipline, rather than chase weak pricing for volume.
Credit driver
| Credit driver | Global reinsurance | U.S. P&C insurance | Expected effect in 2026 |
| Capacity | Abundant | Adequate | More pressure on pricing |
| Competition | Intense across most reinsurance lines | Manageable, but growth pressure remains | Lower margins in selected lines |
| Pricing | Erosion across most lines | More stable than reinsurance | Slightly weaker underwriting profit |
| Policy terms | Looser terms and conditions | More disciplined | Higher risk selection pressure |
| Underwriting | Still profitable | Strong, but slightly lower | Favorable returns, less upside |
| Net earnings | Supported by underwriting and investments | Expected to decline modestly | Stable credit profiles overall |
| Top-line growth | Constrained by softer pricing | Challenged by market conditions | Limited premium expansion |
Shareholders’ Equity Flat
Shareholders’ equity across the Bermuda (re)insurer group stayed flat in 1H 2026. Underwriting gains, investment income and equity market gains offset higher capital returns to shareholders and unrealized losses on fixed-income securities after interest rates rose.
- SiriusPoint recorded the largest shareholders’ equity decline, down 8%, due to the redemption of its preference shares.
- Arch Capital Group and Everest Group posted slight shareholders’ equity declines of less than 1%. Both companies increased common share buybacks by a large margin.
The remaining companies reported modest shareholders’ equity gains of 1% to 2%.
The overall picture is clean, though not risk-free. Bermuda reinsurers delivered strong underwriting profits in 1H 2026, absorbed catastrophe activity with room to spare and kept reserve releases positive. The harder part sits ahead: softening market conditions, limited premium growth and casualty reserve risk, especially in the U.S.
How did Bermuda (re)insurers perform in 2026?
Fitch’s group of seven Bermuda (re)insurers delivered an 85.3% combined ratio in 2026. All seven companies posted underwriting profits, helped by lower catastrophe losses and continued reserve releases.
Why did the combined ratio improve from 2025?
The group’s combined ratio improved from 90% in 2025 to 85.3% in 2026 mainly because catastrophe losses declined. Catastrophe losses added 2.8 percentage points in 2026, compared with 6.7 percentage points in 2025.
What catastrophe losses affected 1H26 results?
Results included losses linked to the Iran conflict. Fitch estimated related industry insured losses at about $3 bn. These losses remained smaller than the catastrophe burden in 2025, when California wildfire losses drove a heavier impact.
Did reserve development support earnings?
Yes. Reserve releases improved the group’s combined ratio by 3 percentage points in 1H 2026, compared with 2.2 percentage points in 2025. Property and specialty lines drove most of the benefit.
Which company reported adverse reserve development?
Hamilton Insurance Group was the only company in Fitch’s Bermuda group to report overall adverse reserve development in 1H 2026. Its adverse development reached 1.4 percentage points.
Why did net premiums written decline?
Net premiums written fell 9% in 2026 as competition increased across the (re)insurance market. Pricing and exposure reductions, non-renewals and the absence of California wildfire reinstatement premiums from 2025 also weighed on volume.
What risks remain for Bermuda reinsurers?
The main pressure points include softer pricing, slower premium growth and U.S. casualty reserve risk. Fitch expects reserve development to remain favorable through 2026 and 2027, though casualty lines still need close attention.
