The reinsurance market's capital allocation priorities have shifted decisively away from property and casualty, with longevity risk emerging as the single most favored line among participants surveyed at the Rendez-Vous de Septembre in Monte Carlo, according to Fitch Ratings.
More than 90% of the 93 respondents - reinsurers, insurers, brokers and other market participants - ranked life and health, financial solutions or specialty as their top priority for new capital. Fewer than 10% selected property or property catastrophe business. Within those top three categories, life and health led at 42%, followed by financial solutions at 28% and specialty at 21%. Within the L&H category itself, longevity was the highest-ranked line for 41% of respondents.
The preference for longevity is not simply a reaction to soft P&C pricing. Fitch's discussions with leading reinsurers found a specific structural preference for longevity risk over mortality and morbidity within L&H, driven by longevity's lower capital intensity and what reinsurers described as more limited return prospects from the alternatives. The appetite is particularly pronounced in the US market, where longevity reinsurance as a product line has historically been less developed than in the UK and Europe.
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The structural shift Fitch documented at Monte Carlo is already visible in the transactions brokers are structuring. The UK pension risk transfer market, where insurers and reinsurers take on pension schemes' longevity and investment risk, is forecast to reach £70 billion in 2026, up 15% from 2025, according to WTW's annual De-risking Report. WTW projected the bulk annuity market to exceed £50 billion and longevity swaps to reach up to £20 billion, with smaller schemes now joining larger ones in seeking cover.
Gemma Millington, senior pensions risk transfer director at WTW, said the market entered 2026 with strong momentum. "Schemes continue to benefit from improved funding levels and strong insurer appetite, which together create very favorable conditions in which to secure members' benefits at compelling prices," she said.
Deal flow confirms the direction. Aon's Netherlands and UK teams advised on Achmea Pension & Life Insurance's completion of two longevity reinsurance deals with Munich Re and Pacific Life Re, covering approximately €8 billion of pension liabilities, effective January 1, 2026. Howden acquired Hymans Robertson's insurance and financial services consulting team in March to expand its actuarial and longevity broking capabilities, a deliberate investment in the infrastructure required to compete for this business. Swiss Re completed its first longevity reinsurance transaction covering US retirees in March - a $2 billion deal - extending a track record that already spans more than 30 longevity transactions across the UK, the Netherlands, Singapore and Australia.
For reinsurance brokers advising cedants on L&H portfolio strategy or structuring longevity transactions, the combination of documented reinsurer appetite and active deal flow is the right environment in which to test new or expanded longevity programs. The capacity is there and the major players are actively competing to deploy it.
Outside L&H, specialty lines remain more attractive to reinsurers than P&C because of their lower correlation with the property cycle and less pronounced rate declines, Fitch said. Within specialty, construction and trade credit insurance are the favored lines based on Fitch's market discussions, with cyber and marine considered less attractive in the current environment. Brokers placing construction or trade credit risk should find that competitive reinsurer appetite persists at January 2027 despite the broader P&C softening.
The T&C and pricing data from the survey completes the picture for brokers heading into renewals. Eighty-six percent of respondents expect terms and conditions to loosen in 2027, with 58% anticipating selective loosening and 28% expecting broad loosening across P&C. Fitch attributed this to persistent excess capital in P&C keeping reinsurer competition focused on terms rather than pricing - lower attachment points and broader event definitions rather than headline rate reductions.
On property catastrophe pricing specifically, 60% of respondents expect further price falls at the 2027 renewals, with most anticipating declines of no more than 10%. Fitch said it does not expect P&C margin erosion to materially affect the sector's capital position, citing rising capitalization buffers and strengthened reserve adequacy. Eighty-eight percent of Fitch-rated global reinsurance groups currently carry stable outlooks.
The practical read for brokers placing P&C and cat business at January 2027 is favorable on both price and terms, but the more strategically significant development from Monte Carlo is the structural one: the capital that would previously have competed for P&C market share is now being directed elsewhere, and longevity and specialty are where the most active reinsurer appetite currently sits.
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