What's Happening?
Bermuda-based re/insurers are expected to see a decline in underwriting profits, with a combined ratio increase to 92% in 2025, up from 90.7% in 2024. This is attributed to higher catastrophe losses and
less favorable reserve development. The market is experiencing a shift towards a buyers' market, particularly in property risk, leading to rate declines. Mergers and acquisitions are on the rise as organic growth opportunities wane, with several significant transactions occurring in 2025.
Why It's Important?
The decline in underwriting profits and the increase in M&A activity reflect broader trends in the reinsurance industry, where companies are seeking to consolidate and optimize their portfolios amid challenging market conditions. This could lead to changes in competitive dynamics and pricing strategies, affecting stakeholders such as policyholders, investors, and regulators. The industry's response to these challenges will be crucial in maintaining financial stability and meeting future demand.
