Reinsurance sector faces softening market conditions despite improved profits

The global reinsurance sector is experiencing a shift toward softer market conditions characterized by increased competition and abundant capacity. While non-life reinsurers reported improved underwriting profitability in the first half of 2026 due to lower catastrophe losses, Fitch Ratings warns that accelerating softening conditions and price declines may lead to deteriorating underlying results through 2027.

In the Asia-Pacific region, reinsurance companies showed resilience, posting a 4.0% increase in net insurance service revenue in 2025. This growth was primarily driven by overseas business and favorable pricing in non-proportional treaties. The combined ratio for the Asia-Pacific composite was reported at 92.0%.

In contrast, Fitch-tracked non-life reinsurance net premiums fell by 6% year-over-year in the first half of 2026. However, life and health reinsurance operations saw a 12% increase in pre-tax income during the same period, providing diversification from property and casualty lines.