‘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. “Even though last year there were some significant catastrophe losses, by and large those losses were within the industry’s expectations,” said Michael Gayle, CEO of CINICO.

“Speaking from memory, I believe industry losses were in excess of US$100 billion last year, but that was within expectations. As a consequence of that it is not unusual to see a return of capital and new reinsurance capacity being made available.”

Speaking more bluntly, “if Hurricane Melissa had hit Florida instead of Jamaica, we wouldn’t have so much excess capital now,” said an international reinsurance executive, who didn’t want to be named. “This industry is cyclical and right now it is softening.”

Local impact

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 for 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. “We have seen a slight reduction in our reinsurance costs this year,” said Gayle. “It is likely that our homeowners’ premiums, for example, instead of going up as they have over the past few years, will probably go down by maybe 5% or 7.5%, all other things being equal.”

It’s not just CINICO – brokers confirm this is happening across the market. “Property insurance premiums had been rising for a few years but during 2025 we saw them start to plateau,” said Christopher Hadome, the senior customer service officer at Vanguard Risk Solutions, an insurance broker in the Cayman Islands. “By mid-December, we saw rates fall and as of January 2026, we were able to offer renewals at lower levels than the previous year.”

Falling reinsurance premiums are more good news for a Cayman property market already benefiting from cheaper mortgages following US interest rate cuts.

“Falling US interest rates are bringing down mortgage rates, which should support the property market in Cayman and mean more people need insurance,” Hadome said.