After years of increases, reinsurance prices expected to fall in 2027

After several years of rising prices, reinsurance costs are expected to fall in 2027 as climate-related claims remain below budget and the sector holds record levels of capital.

Reinsurers and insurers began their annual negotiations in Monaco on September 5. The talks, running through September 9, cover the premiums insurers pay and the conditions attached to their contracts. Pricing typically reflects the previous year’s losses: when reinsurers pay out more, they raise prices, and when claims fall, prices can move lower.

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Reinsurers continue to show very high levels of profitability and, above all, solvency

“Reinsurers continue to show very high levels of profitability and, above all, solvency,” said Marc-Philippe Juilliard, an analyst at S&P. He expects stable ratings outlooks for companies in the sector and said reinsurance “will cost less and less”.

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will cost less and less

The industry had raised prices and tightened risk-acceptance conditions in 2023 after several difficult years marked by costly climate disasters. Those changes helped restore profitability. Five of the world’s six largest reinsurers are European, and their latest results reflected the improvement. Swiss Re recorded first-half profit of 2.4 billion euros, while Germany’s Hannover Re reported 1.4 billion euros.

Insurers are expected to seek lower prices in the new negotiations. Manuel Arrivé of Fitch said natural-catastrophe losses had remained below budget for several half-years, putting downward pressure on prices. Swiss Re calculated that insured natural-catastrophe damage worldwide totaled $42 billion in the first half of 2026, or 36.3 billion euros, 16% below the average for the previous decade. Competition among reinsurers is also expected to drive prices lower, while contributing to greater volatility.

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The fact that natural-catastrophe losses have been below budget for several half-years has an effect on the fall in prices