AM Best has affirmed RenaissanceRe’s ratings with a positive outlook, citing the Bermudian-based reinsurer’s ability to weather a softening market.

The ratings decision came as Kevin O’Donnell, chief executive, warned that abundant supply and slower demand would keep pressure on property-catastrophe reinsurance prices.

“This is not a soft market. It is a changing market,” Mr O’Donnell told analysts after RenaissanceRe reported its second-quarter results.

AM Best affirmed the A+ financial strength rating of Renaissance Reinsurance Ltd and several of its other core subsidiaries. It also kept RenaissanceRe Holdings Ltd’s “a-” long-term issuer credit rating. The outlook for the group’s long-term issuer ratings stayed positive.

The agency said the positive outlook is based on an improvement in operating performance in recent years, as RenaissanceRe’s casualty and speciality businesses scaled and helped to offset the volatility in property-cat reinsurance.

It added that fee income from managing third-party capital had become a “strategic complementary and significant source of earnings” and reducing the company’s reliance on any single source of income.

Reinsurance rates have come under pressure following several years of strong increases. Mr O’Donnell said property-cat prices fell by the “high teens” at the June and July renewals.

“There’s a lot of supply in the market,” he said. “We’re still seeing an increase in demand, but at a reducing level compared to what we’ve seen over the last couple of years.

“That dynamic, I think, will set up for continued pricing pressure moving forward.”

RenaissanceRe expects there to be strong competition into the January 2027 renewals.

However, the company is increasing the amount of property-cat business it writes while using retrocession, insurance-linked securities funds and joint ventures to reduce the risk on its own balance sheet.

“In a declining rate environment, discipline is not about how much you write,” Mr O’Donnell said. “It’s about how much you keep.”

AM Best pointed to that approach as a source of financial flexibility. It said RenaissanceRe’s ability to combine its own balance sheet with third-party capital allowed the group to control how much catastrophe risk it kept.

The agency affirmed A ratings for the Bermudian-based joint ventures DaVinci Reinsurance Ltd, Fontana Reinsurance Ltd and Vermeer Reinsurance Ltd, all with stable outlooks.

AM Best said RenaissanceRe’s risk-adjusted capitalisation stayed at the strongest level under its capital adequacy model. At the end of 2025, the group held more than $1.7 billion in cash, $4.8 billion in short-term investments and $23.6 billion in investment-grade fixed-income securities.

The agency also pointed to RenaissanceRe’s “considerable global market position” in property-cat reinsurance, while noting that casualty and speciality lines now account for more than half of earned premiums.

AM Best warned that RenaissanceRe could still face heavy catastrophe losses and changes in expected casualty claims. However, it said the company’s cautious reserving, extensive reinsurance protection and strong risk management helped to limit those risks.