‘Softening’ Global Reinsurance Market Will Cut Cayman’s Property Insurance Costs

  • Homeowners will benefit from softening global reinsurance premiums that will lead to lower property insurance prices on the islands. It marks a welcome relief for property owners who have been forced to pay rising premiums in recent years.
  • A flood of new investors has boosted reinsurance capacity in recent years, with a recent Reinsurance Outlook from global audit and consultant firm EY showing that global reinsurance capital reached US$735 billion in the first half of 2025, up 30% from US$565 billion in 2020.
  • That increase was fuelled by the entry of new investors into the reinsurance sector. “Private equity firms are entering the insurance space,” noted the Walkers Fundamentals 2025 report. “The continuing convergence between the insurance and asset management markets has been a significant trend in the last year.”
  • Another reason the reinsurance industry is awash with capital is that the damage from natural catastrophes has been less than expected. Michael Gayle, CEO of Cayman Islands National Insurance Company (CINICO), noted that industry losses were in excess of US$100Bn last year, but that was within expectations. As such, it is not unusual to see a return of capital and new reinsurance capacity being made available.
  • Cayman’s flexible financial centre has played a key role in facilitating some of the new entrants to the reinsurance market. But these global reinsurance trends will also have a much more direct impact on people living on the islands. The greater amount of reinsurance capital available means that insurers can get better deals, which they will pass on to their customers.
  • According to ratings agency Moody’s, 75% of reinsurance companies expect premiums to fall. “The word I am getting from the reinsurance industry is that worldwide catastrophe reinsurance costs have gone down by between 5% and 10%,” said Gayle. “That does not necessarily translate to 5% to 10% in each territory or country, but generally speaking, that has been the trend.” As a result, CINICO will offer lower rates of property insurance this year.

(Source: Cayman Compass)