Although reinsurers continue to expand their natural catastrophe business, the pace of growth has slowed from last year and is expected to remain subdued in 2026 as pricing conditions soften, according to a recent report by S&P Global Ratings.
In 2024, the top 19 reinsurers’ aggregate risk exposure rose 14%, but appetite for catastrophe risk has declined in 2025 as pricing softens.
Nonetheless, most reinsurers continue to grow their property catastrophe books in line with capital increases. S&P estimates that, in aggregate, the top 19 reinsurers’ exposure represents 20% of S&P Global Ratings-adjusted TAC, down slightly from 21% in 2024.
S&P said global reinsurers remain in a strong position, with capital at record levels and healthy underwriting margin prospects. While conditions have started to soften and volatility remains high, reinsurers are expected to defend their positions. Following several years of positive pricing corrections, property catastrophe is likely to remain attractive for reinsurers in 2026.
Given the uncertain and volatile environment, S&P expects reinsurers to demonstrate prudent risk management when expanding their property catastrophe portfolios in 2026.
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At the sector level, S&P believes capitalisation can withstand severe annual industrywide losses above $300 billion, noting that losses of this magnitude are unlikely to reduce capitalisation below the 99.99% confidence level.
S&P also highlighted the resilience of its sample, stating that all 19 reinsurers would sustain their capital adequacy in 2025 even if aggregate losses reached a one-in-50-years stress scenario.
Sachin Bhojani, credit analyst at S&P Global Ratings, said, “We believe the top 19 global reinsurers continue to have sound earnings and capital buffers to withstand severe stress before capital would be affected. Even though losses from the California wildfires totaled $40 billion, we expect 50% of the annual catastrophe budget will be available over the remainder of the year.”
The report noted that the industry faces headwinds from claims inflation, rising U.S. casualty claims, increasing climate variability, and financial market volatility. However, global reinsurers’ robust capital adequacy and solid margins provide some protection against major shocks, including natural catastrophes.
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