Tashkent, Uzbekistan (UzDaily.uz) — Fitch Ratings has maintained a negative outlook for the global reinsurance sector for 2027, expecting operating conditions to gradually weaken while the sector’s performance remains strong. The main factors will be further declines in reinsurance prices and rising claims costs.
According to the agency, price declines in 2027 will be less pronounced than in 2026, but excess capital will continue to intensify competition among reinsurers. Capital supply will remain above demand, creating conditions favorable to buyers.
Fitch expects the soft market in property reinsurance to persist in 2027 in the absence of a major catastrophe loss. Selective easing of contract terms could further contribute to lower prices.
Pressure on claims costs will continue to increase due to economic, social and medical inflation, climate change, as well as new liabilities related to geopolitical risks and artificial intelligence. At the same time, reinsurers are likely to assume a larger share of losses as insurers normalize their risk retention after the elevated levels seen during the hard market.
According to Fitch’s forecast, the decline in prices observed since mid-2024 will have a greater impact on reinsurers’ financial results in 2027. Renewed inflationary pressures and climate change will add further pressure, potentially leading to a moderate deterioration in the combined ratio and return on equity.
At the same time, underwriting discipline, portfolio optimization, reserve releases from prior years and favorable investment income should mitigate the impact of these factors on profitability.
Under these conditions, Fitch noted that the performance of individual reinsurers will depend on effective management of the insurance cycle and disciplined capital allocation.
