At the recent Convergence 2026 conference held in Bermuda, prominent CEOs from the reinsurance sector conveyed a nuanced perspective on the current state of the property catastrophe market. They indicated that despite a reduction in rates from their recent peak, the industry still presents ample opportunities for substantial profits. However, these projections are accompanied by certain cautionary signals.
Reinsurance Executives Discuss Market Dynamics and Future Outlook
During the concluding CEO panel discussion at the Convergence 2026 conference in Bermuda, industry leaders Ryan Mather, CEO of Ariel Re, and Cathal Carr, CEO of Oak Global, offered their insights into the evolving reinsurance market. The discussion, held on October 15th, 2026, centered on the current market cycle, its comparison to previous years, and the persistence of attractive investment opportunities.
Mather highlighted that approximately 85% of Ariel Re's risk exposure stems from U.S. property catastrophe. Despite a decline in prices over the past year, he stressed that considerable "runway" remains for profitable ventures. He articulated that well-priced risks requiring substantial capital continue to be available, and for those with expertise, the potential for strong profits endures beyond just property risks.
Carr presented Oak Global's methodical approach to market assessment, emphasizing a quantified evaluation of market attractiveness rather than relying on emotional responses. He categorized the current landscape not as a "soft market," but rather a "softening market." This distinction, he explained, is crucial for separating the trajectory from the actual adequacy of returns. Oak Global employs frameworks that consider net combined ratio, return on capital, and the level of risk within each syndicate, evaluating various return periods to determine investor exposure. This systematic approach establishes boundaries for surplus, adequate, and inadequate returns, guiding internal planning and transparent communication with investors.
Reflecting on market phases, Carr noted that the period from 2023 to 2025 was characterized by a "surplus return environment," which has since transitioned into an "adequate environment" in 2026. He anticipates this adequate return band to persist into the following year, supported by positive fundamental factors despite rate adjustments.
Mather provided additional historical context, recalling that the market experienced a generational high between 2023 and 2024. He stated that Ariel Re observed a remarkable 48% risk-adjusted rate change from 2022 to 2023, followed by further rate increases into 2025, before the recent decline. Even with these reductions, rates remain approximately 25% higher than in 2022, which was already considered adequate. He emphasized that the focus extends beyond just price, with portfolio construction being a critical dynamic. He drew a parallel to the market sentiment of 2013, suggesting a similar feeling of adjustment, but noted that the current market exhibits greater resilience and robustness, with balance sheets having been effectively recharged over recent years.
Despite this resilience, Mather expressed apprehension regarding the unprecedented speed of rate decreases observed in 2026. He voiced hope that this rapid adjustment is merely a one-year correction to a more stable level, rather than the onset of a sustained downward trend.
Carr further cautioned against over-reliance on past market cycles, reminding the audience that loss activity will inevitably resurface. He underscored the importance for underwriting businesses and investors to remain disciplined, avoiding undue influence from past levels of activity or inactivity. He stressed the industry's need to meticulously price for expected losses, regardless of recent trends, to ensure long-term stability and profitability.
The insights shared by Mather and Carr underscore a period of cautious optimism within the reinsurance market. While profitability remains achievable, the landscape demands strategic foresight, disciplined underwriting, and a pragmatic approach to risk assessment. The rapid shifts in rates serve as a critical reminder of the market's dynamic nature, necessitating constant vigilance and adaptation to maintain an adequate return environment. The emphasis on robust portfolio construction and transparent investor communication will be paramount as the industry navigates future challenges and opportunities.
