Fitch Ratings: 1/1 renewals will have T&Cs focus and be 'less price led'

The 1/1 reinsurance renewal season will be “increasingly focused on terms and conditions”, with negotiations around “lower attachment points” and “higher limits” rather than being purely price led, according to Manuel Arrivé, a director at credit rating and research agency Fitch Ratings.

Addressing attendees at this year’s Rendez-Vous de Septembre (RVS) conference in Monte Carlo on 6 September 2026, Arrivé confirmed Fitch Ratings’ prediction that “competition” at 1/1 renewals will be “increasingly focused on terms and conditions” rather than being driven by price.

For him, primary carriers will seek to negotiate “lower attachment points” and “higher limits”, as well as different “clauses” and “definitions” ahead of January’s reinsurance renewal date.

Arrivé explained: “All of these things will be within focus. We think that reinsurers will try to resist those pressures as far as possible. But, with the strong earnings they are likely to report in 2026, [these are] not going to be easy discussions.”

Controlled descent – not a fall off the cliff

Fitch Ratings used its RVS briefing session to update delegates on its global reinsurance outlook for 2027, with the agency repeating its 2026 outlook classification of “deteriorating” for the upcoming year.

This is because of a greater volume of credit negative factors versus credit positive, Arrivé noted.

He identified persistent excess capital, lower pricing, more flexible terms, inflationary pressures, rising claims costs, climate change and associated catastrophe losses, as well as social inflation as all driving a credit negative environment.

Credit positive market influences formed a much shorter list, with Arrivé highlighting ongoing underwriting discipline and long-term growth of reinsurance demand as the only two factors buoying the sector.

Credit neutral elements, meanwhile, included subdued economic growth, stabilising investment yields, general market volatility, biometric risks and supervision.

However, Arrivé explained that Fitch Ratings’ “deteriorating” outlook was a “nuanced” one, with revenue pressure coming to life as “a controlled descent” rather than “a fall off the cliff”.

He continued: “We have maintained our outlook for the global reinsurance sector at deteriorating and that reflects weaker operating and business conditions relative to 2026.

“There is abundant capital, which drives the soft market, and along with rising claims inflation, that will continue to put pressure on revenues. That pressure will intensify, but this is going to be a controlled descent – not a fall off the cliff.

“Capitalisation remains very strong. Reserve buffers are substantial and investment income should still be supportive of earnings. All of these factors should, to some extent, alleviate pressure on margin.

“So, the message we have today is a nuanced one. The direction is weaker, but the starting point is strong and we believe that most reinsurers will be able to navigate through this more challenging phase of the cycle.”