Fitch: global reinsurance market outlook revised to “deteriorating”

Fitch Ratings has downgraded the outlook for the global reinsurance market from “neutral” to “deteriorating.” The rating agency anticipates that the sector will face more challenging operating and commercial conditions in 2026.

Abundant capacity and intense competition in the non-life sector are expected to adversely impact reinsurance rates.

Rising claims costs, driven by an increase in natural disasters and persistent social inflation, are likely to strain reinsurers’ underwriting margins.

Fitch forecasts a slight deterioration in combined ratios and return on equity in 2026. While this decline is mainly attributed to lower rates since mid-2024, and to higher claims expenses, it will be partially offset by continued underwriting discipline, active portfolio optimization, and favorable investment returns.

Despite these challenges, the agency expects the sector’s capitalization to remain strong, providing sufficient buffer to absorb potential market shocks.