Fitch shifts outlook on global reinsurers to neutral

By Carolyn Cohn

LONDON (Reuters) -Fitch has changed its outlook on global reinsurers to neutral from improving, adding on Thursday it expected the sector to remain strong but that prices had probably passed their peak.

Reinsurers, which insure insurers, have raised their rates in recent years in response to losses from the COVID-19 pandemic, wars and natural catastrophes. Industry sources, however, have mixed views on whether prices will keep rising.

"We expect balance sheet strength and financial performance to remain resilient in 2025, but further improvement is less likely," Fitch analyst Manuel Arrive told a media briefing.

There was likely to be a "moderate softening" in property catastrophe reinsurance rates at the key Jan. 1 renewal date for reinsurers, Arrive said, adding that risks from large natural catastrophes such as hurricanes remained.

"If there is a high magnitude event, rates could harden again," Arrive said.

Insurance ratings agency AM Best said this week it expected "hard" - or high - reinsurance pricing conditions to last longer than in previous cycles.

Meanwhile, Lloyd's of London chairman Bruce Carnegie-Brown told Reuters that commercial insurance rates may not be falling yet.

Tracy Hatlestad, head of property reinsurance at broker Aon, however, told a webinar that she expected property reinsurance prices to soften.

S&P Global this week retained its stable outlook for reinsurers, while Moody's raised its outlook to positive from stable.

Reinsurers meet for their annual conference in Monte Carlo next week to hammer out January pricing deals with insurers.

(Reporting by Carolyn Cohn; Editing by Kirstin Ridley and Alexander Smith)