Fitch flags profit pressure for Bermuda re/insurers

Bermuda’s re/insurers saw profits ease in 2025 as market conditions softened, with Fitch-rated carriers posting a combined ratio of 92%, up from 90.7% a year earlier, according to the ratings agency’s latest report.

The ‘Bermuda (Re)insurance Monitor: 2026’ attributed catastrophe losses to the rise, with about eight percentage points added in 2025, primarily from the California wildfires, up from 6.4 points in 2024.

The January 2026 reinsurance renewals demonstrated a strong shift to a buyers’ market, particularly for property risk, which experienced its largest rate declines in over a decade. Fitch anticipates softening market conditions to continue at the mid-year 2026 renewals as the competitive environment intensifies, although risk-adjusted returns should remain attractive.

Shareholders’ equity grew 12% at nine month end 2025 from year end 2024 due to underwriting gains, solid investment income and equity and bond market gains, partially offset by a sizable increase in capital returned to shareholders. Fitch expects ROE will remain favourable in 2025 at near 17%, down only slightly from 17.8% in 2024.

Bermuda consolidation activity will likely continue as companies use M&A as an option to deploy accumulated capital amid slowing organic growth in a softening market. Consolidation may moderate competitive pressures as overall capacity falls, but Fitch would likely view negatively any individual deal pursuing greater scale and diversity without a clear strategic rationale.

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