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Fitch Ratings, a global credit ratings and research agency, said Bermuda-based re/insurers delivered a strong financial performance during the first half of 2026, helped by a reduction in catastrophe-related losses.
However, the company noted that challenging market conditions, including abundant capacity and strong competition, continued to weigh on pricing and premium growth.
Fitch said conditions across the global reinsurance market remained difficult, with competition contributing to lower prices across many lines of business and more flexible policy terms and conditions. Despite the softer market, the agency expects reinsurers to continue generating favourable returns during 2026.
The company also expects the US property and casualty insurance market to remain broadly stable this year. Fitch anticipates slightly lower underwriting profits and net earnings, with insurers continuing to perform well while facing challenges to revenue growth. Bermuda’s re/insurance companies remain exposed to these wider market trends.
The seven Bermuda re/insurers covered by Fitch reported an aggregate combined ratio of 85.3% for the first half of 2026. Each company generated an underwriting profit during the period. Catastrophe losses accounted for 2.8 percentage points of the combined ratio, including claims connected with the Iran conflict. Fitch Ratings estimated total industry insured losses from these events at approximately USD $3 billion.
The result was an improvement on the 90.0% combined ratio recorded for 2025. That year was affected by significantly higher catastrophe losses, which added 6.7 percentage points to the combined ratio, primarily because of the California wildfires.
When catastrophe losses were excluded, the accident-year combined ratio stood at 85.5% in both the first half of 2026 and full-year 2025. This indicated that underlying underwriting performance remained broadly consistent despite the changing catastrophe environment.
Profitability remained high, with net income return on equity reaching 15.7% during the first half. Fitch Ratings noted that this was below the 18.6% achieved in 2025, but remained a strong level of return.
Reserve development also continued to provide support to reported underwriting results. Fitch Ratings said reserve releases improved the group’s combined ratio by 3.0 percentage points during the first half of 2026, compared with a 2.2 percentage-point benefit during 2025.
The improvement was mainly associated with property and specialty lines. Hamilton Insurance Group, Ltd. was the only company in the group to record an overall adverse reserve development during the period, amounting to 1.4 percentage points.
Fitch said Hamilton and several other companies recognised further losses linked to the Baltimore Bridge collapse. Estimated industry losses from the incident rose to USD $2.8 billion, compared with the previous estimate of USD $1.5 billion.
RenaissanceRe Holdings Ltd. recorded the strongest favourable reserve development among the companies reviewed by Fitch Ratings, at 8.2 percentage points.
Fitch expects reserve development across the Bermuda re/insurance sector to remain favourable through 2026 and 2027. However, the agency continues to identify US casualty business as an area where reserve adequacy and claims development warrant attention. Premium volumes presented a less positive picture. Fitch reported a 9% decline in net premiums written across the seven-company group during the first half of 2026, with four companies recording year-on-year reductions.
According to Fitch, the decline reflected a combination of lower pricing, reduced exposures and non-renewals as competition increased across the re/insurance market. The comparison was also affected by the absence of reinstatement premiums related to the California wildfires, which had boosted premium volumes in the first half of 2025.
New business opportunities provided some offset, but were not sufficient to reverse the overall decline. Hamilton Insurance Group, Ltd. recorded 10% growth in net premiums written, supported by expansion in casualty Re/insurance and specialty insurance.
Fitch expects competitive conditions to continue limiting premium growth across the group. Nevertheless, the agency expects insurers to maintain disciplined underwriting as they respond to the softer market.
Capital levels were broadly stable. Fitch said shareholders’ equity across the Bermuda re/insurance group was essentially unchanged during the first half of 2026, as strong operating and investment results were largely balanced by higher distributions to shareholders and losses on fixed-income investments.
The rise in interest rates resulted in unrealised losses on fixed-income securities, which offset some of the gains generated through underwriting, investment income and equity markets. SiriusPoint Ltd. recorded the largest reduction in shareholders’ equity, falling by 8%. Fitch linked the decline primarily to the redemption of preference shares.
Arch Capital Group Ltd. and Everest Group, Ltd. also recorded modest reductions of less than 1%. Both companies significantly increased their common share repurchases during the period, contributing to the movement in shareholders’ equity. The other companies in Fitch Ratings’ group recorded modest increases in shareholders’ equity of between 1% and 2%.
The company expects competitive pressures to remain a feature of the market, particularly for premium growth and pricing. However, Fitch expects Bermuda-based re/insurers to continue producing favourable returns during 2026, supported by disciplined underwriting and generally resilient operating performance.
The post Bermuda re/insurers post strong H1’26 results as cat losses ease: Fitch appeared first on ReinsuranceNe.ws.
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