Fitch Ratings forecasts a 2021 reinsurance combined ratio of 99.1%, reflecting 9.0pp average catastrophe losses, 1.5pp for additional coronavirus losses and 1.0pp of reserve releases. The reinsurance group underlying accident-year combined ratio, excluding catastrophes and coronavirus losses, is expected to improve to 89.6% in 2021, down from 90.5% in 2020 and 92.9% in 2019, as reinsurance rate rises across almost all business lines outpace loss cost inflation.Fitch forecasts a 6.5% return on equity (ROE) in 2021, in line with the estimated 6%–7% cost of capital, as operating results remain stressed with record low investment yields. The sector’s capital strength was largely unscathed despite substantial pandemic-related losses across the non-life reinsurance, non-life insurance and life and health reinsurance mortality businesses.