Rating agencies see reinsurance prices falling, discipline holding

MONTE CARLO, Monaco — Property reinsurance rates are expected to continue declining as more capacity enters the market, but reinsurers will likely stay profitable and largely maintain the high retention levels imposed on buyers over the past three years, said rating agency analysts.

Underwriting discipline, a feature of the sector since the end of 2023, is unlikely to slacken as investors pressure companies to provide attractive returns on equity, they said during presentations Sunday at the Rendez-Vous de Septembre reinsurance meeting. The meeting, which sees reinsurers and brokers from around the world converge on Monte Carlo, marks the traditional start of the year-end renewals season.

Property catastrophe prices, which fell between 6% and 15% during mid-year renewals, are expected to continue falling at year-end as supply outweighs demand, barring significant catastrophe losses in the second half, said Manuel Arrivé, a Paris-based director at Fitch Ratings.

“There is abundant capacity with traditional and alternative capital at a record high, and we expect capital supply to keep building and outpacing incremental growth in demand from cedents,” he said.

Reinsurance capital has grown to $650 billion in 2025 from $607 billion last year, according to Guy Carpenter & Co.

Property/casualty reinsurance premium growth will slow as rates ease, reinsurers will likely increase share repurchases, and mergers and acquisitions may accelerate, said Brian Schneider, Chicago-based senior director at Fitch.

Despite the increased capacity, reinsurers are unlikely to drop prices substantially, he said.

“Investors have higher expectations as to what returns should be,” Mr. Schneider said.

Since the 2023 market reset, the role of reinsurance has shifted from protecting earnings to protecting capital, said Michael Lagomarsino, senior director at A.M. Best Co. in Oldwick, New Jersey.

Attachment points remain at the elevated levels reinsurers imposed at the end of 2023, and pricing is still higher than two years ago, he said.

“Reinsurers are in a very strong position to continue to navigate this transitioning market, as margins remain strong, capital remains robust and diversification remains a strength,” Mr. Lagomarsino said.

While the sector could face significant losses during the hurricane season and pressure from macroeconomic conditions, the industry appears resilient, said Greg Carter, London-based managing director at Best.

“We’re undoubtedly past the peak in terms of pricing, but there’s no way you can describe this as a soft market,” he said.