Kathmandu. Even if underwriting profits remain strong next year due to losses from natural disasters, the global reinsurance market could remain under pricing pressure until 2027.
JP Morgan, a global investment bank and financial services firm, has made this estimate. In a new research report on the European reinsurance sector, JP Morgan said the current market backdrop shows no signs of improvement in reinsurance pricing.
Analysts at the firm expect reinsurance companies to continue to report solid financial results through 2026. However, weak pricing and low earnings will continue to characterize the market.
According to JPMorgan, property catastrophe pricing has softened significantly, and while profits remain strong, the experience of real catastrophe losses remains a major factor impacting the reinsurance cycle.
With lower-than-expected catastrophe losses so far this year, there is little room for pricing to improve anytime soon, the report said. Analysts say reinsurance prices are unlikely to show signs of stabilisation until 2027. ’
JPMorgan said previous turnarounds in the reinsurance market typically came after several years of high catastrophe losses, rather than a change in domestic profits. JPMorgan pointed to past examples such as 2011, 2017 and 2022 that higher-than-expected catastrophic claims have strengthened prices in the recent renewal period.
JPMorgan estimates that lower-than-expected natural disaster losses in the first six months of 2026 have boosted the pre-tax earnings of major European reinsurance companies by about 12 percent on average. The firm believes that this positive loss experience is either supporting strong reported earnings or allowing companies to strengthen reserve buffers.
That’s why JP Morgan expects the sector to be highly profitable this year unless there is a significant change in catastrophic activity for the rest of 2026. –Agency
