Global insured nat cat losses reached $92 billion in nine months, 29 percent below the ten-year average, and Munich Re raised 2026 guidance to €6.6 billion. Yet the Colombia and Venezuela earthquakes show how little of Latin American loss is insured.
Benign losses, record capital, softer terms
Gallagher Re’s third-quarter report, covered on 21 October, puts global insured natural catastrophe losses at $92 billion for the first nine months of 2026: 29 percent below the ten-year average and the lowest year-to-date figure since 2019. No single event has exceeded $10 billion insured for six consecutive quarters, and severe convective storm accounted for nearly 60 percent of the total. Dedicated reinsurance capital stands at a record $688 billion, with sector ROE of 19.9 percent in the first half (Insurance Business).
Munich Re’s preliminary Q3 net profit of about €1.7 billion beat the €1.48 billion consensus and lifted its 2026 guidance from €6.3 billion to €6.6 billion. At the July renewals it cut written volume by 9.1 percent as risk-adjusted prices fell 5.5 percent, while the Guy Carpenter property-cat rate-on-line index is down 16 percent in 2026. Fitch expects further softening at 1 January 2027 (Insurance Business, 23 October).
Latin America: the protection gap is the story
Gallagher Re estimates the August Colombia earthquake at $13 billion in economic loss, about 2.3 percent of GDP, and the June Venezuela earthquake near $25 billion, yet the combined insured loss is only about $3 billion. At the 1 July Latin American renewals, property-cat XoL rates fell 15-20 percent and proportional ceding commissions rose 2-3 points, with Howden Re noting appetite shifting toward casualty and specialty lines.
Separately, Epsilon Re, a Barbados-domiciled start-up writing 94.6 percent of its premium in Mexico with group life as its largest line at 51.5 percent, received its first AM Best rating in July: A- (Excellent), stable outlook. AM Best assessed its balance sheet as very strong but its business profile only neutral, citing single-market concentration (Insurance Business, 22 July).
What it means for Power Re
Benign catastrophe years and abundant capital are exactly when pricing discipline erodes, and the Epsilon Re rating shows that AM Best rewards a strong balance sheet while still discounting concentration. For Power Re, whose specialist focus is Group Life & Personal Accident in Latin America, the lesson is to keep growth tied to capital and risk-adjusted returns, diversify by country and cedent deliberately, and let a data-rich, short-tail book speak through consistent results rather than volume.
Power Re perspective
This commentary reflects Power Re’s reading of public market reporting. It is general information, not underwriting, investment or legal advice.
