AM Best Maintains Stable Outlook for Global Non-Life Reinsurance

AM Best has maintained its stable outlook for the global non-life reinsurance segment, citing strong fundamentals as the market moves beyond the peak of the hard property pricing cycle. 

In its Best's Market Segment Report, "Market Segment Outlook—Global Non-Life Reinsurance," AM Best said strong performance since 2023 has generated robust organic capital, providing reinsurers with ample capacity to return capital to shareholders or deploy it to write business. 

Although the reinsurance pricing cycle has moved past the peak of a prolonged hard property market, reinsurers have largely maintained underwriting discipline, including higher attachment points and tighter terms and conditions, according to the report. Projected margins have narrowed, but property exposures in aggregate continue to be priced above levels considered technically adequate. 

"Balance sheet strength across the non-life reinsurance segment is favorable from a credit perspective, although the imbalance created by abundant capacity, partially offset by growth in demand for reinsurance, has been a primary driver of pricing erosion in property and property catastrophe lines of business," Michael Lagomarsino, senior director at AM Best, said. 

The segment continues to face pressure from persistent social inflation, increased frequency and severity of weather-related events, and geopolitical and macroeconomic uncertainty. 

Over the next 12 months, however, AM Best expects record capital levels, continued underwriting discipline, and supportive investment income to help keep returns at or above the cost of capital and sustain profitability. 

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