AM Best’s top 50 reinsurers: Profitability holds firm as softer market gathers pace

Global reinsurers maintained strong underwriting profitability in 2025 despite material price softening, although AM Best expects earnings to normalise as competitive pressures intensify.

The rating agency said the industry generated record levels of capital following several years of strong profitability, supported by higher rates, improved terms and conditions and investment returns.

“Reinsurers’ underwriting performance continued to be strong in 2025, despite some material price softening,” AM Best said.

“The industry generated record levels of capital, driven by multiple years of strong profitability after rates hardened and terms and conditions became more favorable for reinsurers.”

Despite the $40bn California wildfire loss early in the year, “nearly all reinsurers were able to book strong underwriting results by the end of that year, a strong testament to the current favorable pricing environment”.

However, AM Best said the market has continued moving towards softer conditions during 2026.

“As 2026 continues to play out, the renewal seasons have painted a clear picture of the state of the market, which continues to transition from its period of rapid hardening to a more competitive, softening market,” the report said.

“While rates continue to decline, the market overall remains favorable, though with fewer opportunities to deploy the substantial capital accumulated over the last few years.”

Munich Re top dog, Lloyd’s on the up

Exhibit 1 shows Munich Re reclaiming first place among IFRS 17 reporters, ahead of Swiss Re and Hannover Re, with reinsurance revenue of $35.4bn.

AM Best said currency movements played an important role: “Utilizing the prior year conversion rate, Swiss Re would have remained in first place; however, the 12.9% rise in the Euro year-over-year drove Munich Re to the first-place position.”

Lloyd’s meanwhile overtook Berkshire Hathaway to lead the non-IFRS 17 rankings, recording $27.1bn of reinsurance premiums, as shown in Exhibit 1.

Berkley and Hamilton both move up

Exhibit 2 highlights Hamilton Insurance Group and WR Berkley as notable upward movers, each gaining four places, while Core Specialty fell five positions.

Looking ahead, AM Best expects pressure on underwriting results to increase.

“Record traditional and third-party capital is expected to sustain ample market capacity into 2027, increasing competitive pressures while still allowing well-disciplined market participants to generate attractive returns,” it said.

AM Best said it expects “some deterioration in underwriting results between year-end 2025 and year-end 2026, due largely to rate declines”, while market growth is also likely to remain subdued as reinsurers maintain underwriting discipline.