Softening conditions in the reinsurance market call for companies to balance discipline with pursuing growth opportunities, says EY.

The professional-services firm has released its Reinsurance Outlook, which provides insights designed to help C-suites navigate a new cycle in the reinsurance market.

The outlook notes that Bermuda reinsurers expressed confidence for the near term, based on recent performance and strong terms, as well as disciplined retrocession structures and robust Insurance-Linked Securities (ILS) inflows.

This is against a backdrop of shifting reinsurance market dynamics driving slight price softening, according to EY.

“Cedants have opted to retain more risk or use alternative risk transfer solutions, while slower growth in some primary insurance segments has dampened demand, and capital supply continues to increase,” an EY spokesperson said.

Key insights in the outlook include building strategies to balance discipline with innovative growth opportunities, and why investing in technology and talent is fundamental to long-term resilience and success.

The outlook also covers considerations for leaders navigating the evolving reinsurance landscape, from balancing underwriting discipline with stronger client relationships; to the role of AI in advancing existing growth, innovation and transformation programmes; to recruitment strategies to fill future talent gaps.

Simon Burtwell, EY Bermuda partner and regional consulting leader, said: “Bold leadership will play a decisive role in executing the strategic discipline and unerring focus on risk-adjusted profitability of rigorous cycle management.

“Those who emerge strongest from this market phase will match that discipline with thoughtful innovation to embrace new opportunities.”

Craig Redcliffe, EY Bermuda partner and regional insurance leader, said: “A softening cycle heightens the need to fully leverage AI, data science and analytics to drive smarter decisions and performance.

“A human-centric approach — with a focus on upskilling and an infusion of new talent — will be critical to optimising returns on technology investments.

“Leaders who look beyond efficiency goals to ensure that their AI implementation also aligns with core business objectives, growth strategies, and data management and interpretation, will differentiate themselves from competitors.”

To access the full outlook, click here.