Bermuda-based re/insurers monitored by Fitch are expected to see a d
rop in underwriting profit in 2025, reporting an average combined ratio of 92%, up from 90.7% in full-year 2024, the ratings agency said.
For the first nine months of 2025, Fitch said the group of Bermuda re/insurers it tracks posted solid underwriting profit
s, with a combined ratio of 91.0%, up from 86.4% for 9M 2024. (Combined ratios below 100% indicate underwriting profits).
“This increase [in combined ratios] was due to higher catastrophe losses, slightly less favorable reserve development and a de
terioration in the underlying underwriting result,” Fitch said, noting that all companies in the group posted underwriting gains, although most posted a higher combined ratio in 9M 2025 than in 9M 2024.
The exceptions were AXIS and Aspen, which posted combined ratios below 90% — both at 89.5%. (Fitch monitors nine Bermuda re/insurers of which two do not report 9M results).
Catastrophe losses will represent about 8 percentage points on the 2025 combined ratio, primarily from the California wildfires, up from 6.4 points in 2024, according to Fitch Ratings in its “Bermuda Re/Insurance Monitor: 2026.”
The California wildfires in January 2025 resulted in US$40 billion of insured losses and US$53 billion of economic losses. (Insured losses are included in the economic totals).
“The January 2026 reinsurance renewals demonstrated a strong shift to a buyers’ market, particularly for property risk, which experienced its largest rate declines in over a decade,” said the Fitch report.
“Terms and conditions marginally loosened, although attachment points and retentions generally held. Pricing decreases in specialty
were more modest, while casualty was stable as the market continues to manage increasing loss costs from social inflation,” the report continued.
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“Bermuda re/insurers will produce reduced returns in 2025 and 2026, as record high capital levels push a softening market, al
though profitability will remain favorable by historical standards,” commented Brian Schneider, senior director, Fitch Ratings, who was quoted in the report.
Shareholders’ equity grew 12% at 9M 2025 from year end 2024 as a result of underwriting gains, strong investment incom
and equity and bond market gains, said Fitch, adding that return on equity will remain favorable in 2025 at near 17%, down only slightly from 17.8% in 2024.