KBW expects property catastrophe rates to fall at least 10% at the January 2027 renewals, while Mapfre Economics puts Latin America’s insurance protection gap at $334 billion, two-thirds of it in Life.
Property cat: a third consecutive cut
KBW, as reported by Beinsure on 9 November, forecasts property catastrophe excess-of-loss rates falling at least 10% at the 1 January 2027 renewals, after reductions of about 12% at January 2026 and 16% at mid-year 2026. Supply keeps outpacing demand: AM Best counts a record $17.3 billion of Rule 144A property cat bond issuance in the first half of 2026, and Fitch reports that P&C reinsurance net premiums written fell 6% to $73.7 billion over the same period. Moody’s September buyer survey found 86% of cedents expect property prices to fall again in 2027, with almost 40% expecting portfolio-wide cuts of 7.5% to 15%.
Earnings remain strong for now. SCOR reported on 30 October a third-quarter P&C combined ratio of 84.1%, including a 9.1% nat cat ratio, an annualised ROE of 20.4% and an estimated solvency ratio of 221%. These are the margins being competed away; the question for 2027 is how much of the cushion survives a normal catastrophe year.
Latin America: the gap is in Life, not in cat capacity
Mapfre Economics, in figures published by El Español on 10 November, puts Latin American insurance premiums at $218.3 billion in 2025, up only 1.5%, with a net sector result of $15.3 billion. The region’s protection gap grew 5.1% to $334 billion, and Life accounts for 66.1% of it, while Life premiums fell 2.6% in 2025. Premium growth is forecast at about 6.8% in 2026 and 7.6% in 2027. AM Best, in its September Latin American reinsurance segment report, describes capacity as abundant and terms as generally flexible, notes that local Brazilian reinsurers’ share of ceded premium fell from about 70% in 2015–2018 to 53% by end-2025, and warns that a severe Super El Niño season could still tip the balance toward a targeted hard market.
What it means for Power Re
The capital flooding property cat is largely irrelevant to the region’s largest unmet need. Group Life and Personal Accident do not compete with cat bonds; they depend on mortality and morbidity data, wording control and long cedent relationships. Power Re’s specialist focus on these lines keeps it out of the steepest part of the price decline, but it does not exempt it from discipline: softer terms elsewhere push capacity into adjacent lines. Power Re will price to technical rate, write where it can verify experience, and treat a widening Life protection gap as a reason for patient, data-led growth 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.
