Bermuda reinsurers are heading towards the key January renewal season expecting further, though more moderate, declines in property catastrophe prices, according to a Fitch Ratings survey at the Monte Carlo Rendez-Vous this month.

Sixty per cent of the 93 respondents expected property catastrophe reinsurance prices to fall at the January 2027 renewals. Most anticipated cuts of no more than 10 per cent, although one fifth of those expecting declines predicted even more reductions than that.

The survey of re/insurers, brokers and other market participants comes after sharp price reductions at the January 2026 renewals, when record global reinsurance capital of $760 billion, including $124 billion of third-party capital, gave buyers greater leverage.

Fitch said further but less pronounced price declines were consistent with its overall deteriorating outlook for the global reinsurance sector.

The rating agency found that competition is likely to show up in contract terms as well as headline price. Eighty-six per cent of respondents expected terms and conditions to loosen, including 58 per cent expecting selective easing and 28 per cent expecting broader concessions.

Fitch said this could include lower attachment points, broader event definitions and other changes that give insurers more protection before their own losses reach the level at which reinsurance responds.

The survey also pointed to a shift in where reinsurers want to deploy new capital. More than 90 per cent of respondents identified life and health, financial solutions or specialty lines as their highest priority, compared with fewer than 10 per cent for property or property catastrophe business.

Life and health was the leading choice, cited by 42 per cent of respondents, followed by financial solutions at 28 per cent and specialty business at 21 per cent. Within life and health, longevity risk was the most favoured area.

That has major significance for Bermuda, which accounted for 85 per cent of offshore life reinsurance reserves at the end of 2025 and oversees about 34 per cent of global asset-intensive reinsurance, according to Fitch and KBRA respectively. Bermuda insurers also accounted for about 92 per cent of global alternative capital in 2024.

Fitch said life and health was likely to offer more attractive growth opportunities than property and casualty business, given softening in the latter market. It added that specialty lines were also drawing greater interest because they were less closely tied to the property cycle and had seen less severe rate declines.

Despite the pressure on prices and terms, Fitch said it did not expect erosion in property and casualty margins or the sector to weaken in terms of capital.

“Rising capitalisation buffers and strengthened reserve adequacy provide a solid base for the sector to maintain strong credit fundamentals,” Fitch said.

The agency noted that 88 per cent of Fitch-rated global reinsurance groups have stable outlooks, but said disciplined capital allocation and the balance between growth and profitability would increasingly separate companies’ performance through the next phase of the cycle.