Fitch Changes Outlook on Global Reinsurers

By Carolyn Cohn

LONDON (Reuters) – Fitch has changed its outlook on global reinsurers to neutral from improving, stating on Thursday that it expects the sector to remain strong but that prices have likely passed their peak.

Reinsurers, which insure insurers, have raised their rates in recent years in response to losses from the COVID-19 pandemic, wars, and natural catastrophes. However, industry sources hold mixed views on whether prices will continue to rise.

“We expect balance sheet strength and financial performance to remain resilient in 2025, but further improvement is less likely,” Fitch analyst Manuel Arrive stated during a media briefing.

Arrive noted a likely “moderate softening” in property catastrophe reinsurance rates at the pivotal January 1 renewal date for reinsurers, highlighting the persistent risks posed by significant natural catastrophes such as hurricanes. “If there is a high magnitude event, rates could harden again,” he added.

Insurance ratings agency AM Best noted this week that it anticipates high reinsurance pricing conditions will last longer than in previous cycles. Meanwhile, Lloyd’s of London chairman Bruce Carnegie-Brown indicated to Reuters that commercial insurance rates may not be declining yet.

However, Tracy Hatlestad, head of property reinsurance at broker Aon (NYSE:AON), expressed in a webinar her expectation that property reinsurance prices will soften.

S&P Global retained its stable outlook for reinsurers this week, while Moody’s (NYSE:MCO) upgraded its outlook to positive from stable.

Reinsurers will convene for their annual conference in Monte Carlo next week to negotiate January pricing deals with insurers.