Reinsurers Rethink Growth as Pricing Discipline Tightens

ARTICLE

 

Reinsurers face a harder growth equation as abundant capital, tighter pricing and new risks test underwriting discipline. Capacity remains available, competition has intensified, and pricing terms are under pressure, yet cedents still need stable partners able to protect capital and support complex programs.

 

In this interview, Ramón Martínez Carrera, CEO of Active Re, discusses how the company approached 2025 through portfolio selectivity, technical profitability and disciplined capital use.

 

He explains what Active Re’s 88.4% combined ratio, 16.1% ROE, $26.7 mn technical result and $108 mn in equity say about its operating model.

 

 

The conversation also covers AM Best’s rating reaffirmation, diversification across 129 countries, demand shifts in treaty reinsurance, the role of retrocession, growth in Alternative Risk Transfer, delegated underwriting authorities and the use of AI in treaty account processing.

 

Active Re recently published its 2025 Annual Report, Positioned for What’s Ahead. What is the primary message you want to convey to the market?

 

The central message is that Active Re closed 2025 from a stronger position, supported by a platform that is better prepared to navigate the next stage of the reinsurance cycle.

 

In a market characterized by heightened competition, abundant capital, and evolving pricing and terms, we maintained a selective approach. We prioritized portfolio quality, technical profitability, and efficient capital allocation over volume-driven growth.

 

Our results validate that strategy. We closed the year with a combined ratio of 88.4%, a return on equity of 16.1%, a technical result of $26.7 mn, and total equity of $108 mn.

 

The report demonstrates that our progress is defined not only by how much we grow, but by how we grow: through underwriting discipline, diversification, financial strength, responsible risk management, and long-term relationships.

 

The key takeaways from 2025

 

What were the key takeaways from 2025, and what do they reveal about Active Re’s evolution?

 

The first takeaway is that discipline retains its value even when market conditions intensify competition for volume.

 

Throughout 2025, we made demanding decisions and upheld our technical standards, even when that meant reducing certain exposures or declining opportunities that did not offer an adequate return.

 

Against this backdrop, we are encouraged to see a growing number of established professional reinsurers and MGAs embracing the same discipline: prioritizing profitable, sustainable growth rather than expanding today at the expense of deteriorating pricing that could weaken future results and solvency.

 

We also reaffirmed the importance of diversification. Our business was distributed across EMEA, Latin America and the Caribbean, Asia-Pacific, and North America, with no single region accounting for the majority of gross written premium.

 

A third key takeaway is that technology begins to deliver tangible results when it is embedded within clearly defined technical processes. By year-end 2025, 50% of treaty technical accounts were being processed with the support of artificial intelligence.

 

Taken together, these developments reflect a more diversified, efficient, and resilient Active Re, capable of maintaining consistent technical decision-making across an international platform.

 

Underwriting discipline, historical performance and growth

 

How did Active Re maintain its underwriting discipline in an increasingly competitive environment?

 

Underwriting discipline begins with a rigorous assessment of every opportunity. We evaluate data quality, historical performance, exposures and accumulations, contractual terms, potential severity, and risk-adjusted returns.

 

We do not seek to compete solely on price or deploy capacity simply to meet volume targets. Our priority is to participate in technically sound business that aligns with our risk appetite and where we can contribute expertise, analytical capabilities, and continuity.

 

During 2025, we strengthened portfolio selectivity and enhanced coordination across underwriting, retrocession, accumulation management, and capital. This consistency contributed to an 88.4% combined ratio.

 

 

 

In reinsurance, discipline also means knowing when to participate, when to adjust terms, and when to step away from an opportunity. That ability to make informed decisions is essential to preserving profitability throughout the cycle.

 

How do you balance growth with technical profitability and balance sheet protection?

 

At Active Re, growth must be the outcome of a sound strategy rather than a standalone objective. This means deploying capacity where there is an appropriate balance between risk, return, diversification, and capital utilization.

 

In 2025, we prioritized business quality over premium growth. Despite a reduction in certain volumes, we achieved a technical result of $26.7 mn, a return on equity of 16.1%, and total equity of $108 mn.

 

These indicators demonstrate that value can be created without compromising technical standards or financial strength. They also underscore the importance of adjusting the portfolio in a timely manner as market conditions evolve.

 

Our objective is to build a platform capable of delivering profitable and sustainable growth while protecting the balance sheet and preserving our ability to meet our commitments across a range of scenarios.

 

AM Best reaffirmed Active Re’s ratings for the third consecutive year. What does this represent for the market?

 

AM Best reaffirmed our Financial Strength Rating of A (Excellent) and our Long-Term Issuer Credit Rating of “a” (Excellent), both with a stable outlook.

 

This reaffirmation provides independent validation of the strength of our balance sheet, the consistency of our operating performance, and the robustness of our enterprise risk management framework.

 

In our industry, financial strength extends beyond the capacity available at renewal. It also encompasses continuity, technical consistency, prudent capital management, and the ability to respond effectively across different market cycles.

 

For cedents and brokers, it reinforces confidence in working with a counterparty that has the financial capacity to honor its commitments and support long-term reinsurance programs.

 

Geographic diversification and strategy

 

Active Re has a presence in 129 countries. How does this diversification contribute to the company’s strategy?

 

Our international presence is the result of a diversification strategy developed progressively and with discipline.

 

In 2025, we generated $169.1 mn in gross written premium, distributed across EMEA at 34.4%, Latin America and the Caribbean at 29%, Asia-Pacific at 24.9%, and North America at 11.4%.

 

No single region represented the majority of the portfolio. This geographic balance helps reduce concentrations, broaden our sources of business, and strengthen our resilience to the different dynamics affecting each market.

 

However, diversification is not simply about operating in more territories. It requires local knowledge, accumulation analysis, a clear understanding of regulatory frameworks, and consistent technical standards across all jurisdictions.

 

Latin America and the Caribbean represented 29% of gross written premium. How do you assess the opportunities in the region?

 

Latin America and the Caribbean remain strategically important to Active Re. In 2025, the region generated $49.2 mn in gross written premium, representing 29% of the total.

 

It is a diverse region, with varying levels of market maturity, regulation, insurance penetration, and risk transfer needs. For that reason, it cannot be approached through a single, uniform strategy.

 

We see opportunities in lines where there is sufficient technical information, appropriate structuring, local expertise, and a reasonable expectation of profitability.

 

Our approach will remain selective and long-term, supported by close relationships with cedents and brokers, as well as by the continued strengthening of our regulatory presence in key markets such as Argentina.

 

Changes in reinsurance demand

 

Where are you seeing the most significant changes in reinsurance demand?

We are seeing increasingly sophisticated demand. Cedents and brokers continue to seek capacity, but they also expect greater flexibility, specialist expertise, structuring efficiency, and continuity.

 

In some jurisdictions, this demand is driven by capital pressures, economic volatility, or regulatory change. In others, it is linked to emerging risks, niche exposures, or the need to develop more efficient structures.

 

We are also seeing growing interest in solutions that combine traditional reinsurance with alternative risk transfer instruments.

 

Our presence in 129 countries, together with our relationships with 628 cedents and 190 brokers, enables us to observe these dynamics from multiple perspectives and adapt our offering without compromising technical consistency.

 

Which business lines drove Active Re’s performance in 2025?

 

Treaty business remained one of the company’s core pillars, particularly across Property & Engineering, Specialty Lines, and Credit & Surety.

 

The development of these lines was supported by a selective approach. We do not seek uniform growth across every area. Instead, we allocate capacity based on business quality, risk-adjusted return, available expertise, and the contribution of each exposure to the overall portfolio.

 

We also continued to strengthen our global retrocession program and our Alternative Risk Transfer platform.

 

The combination of treaty business, specialized lines, alternative structures, and active capital management allows us to address a broad range of needs while maintaining our focus on technical profitability and sustainability.

 

What role does retrocession play in Active Re’s strategy?

 

Retrocession is a central component of our risk and capital management strategy. It enables us to manage accumulations, control volatility, protect the balance sheet, and maintain more stable underwriting capacity.

 

During 2025, we further consolidated our global retrocession program to support the evolution and diversification of the portfolio.

 

An appropriately structured program also helps optimize net retention and allocate capital more efficiently across regions and business lines.

 

However, retrocession does not replace disciplined underwriting; it complements it. The first line of defense must always be the proper selection, assessment, and structuring of risk.

 

AI and alternative risk transfer solutions

 

What is driving interest in alternative risk transfer solutions?

 

Companies are seeking greater control, flexibility, and capital efficiency in the way they manage risk. This is driving interest in captives, protected cells, and other Alternative Risk Transfer, or ART, structures.

 

These solutions can enable an organization to retain more predictable exposures while transferring layers associated with greater severity or volatility to the market. They can also help strengthen risk governance and optimize the total cost of risk.

 

However, these are not standardized solutions. They require reliable information, an appropriate legal and financial structure, actuarial analysis, and alignment with corporate objectives.

 

Our ART platform combines technical expertise, reinsurance capacity, collateral management, and structural knowledge to develop solutions tailored to each client’s needs.

 

Active Re operates with 15 Delegated Underwriting Authorities. What conditions must be in place for a DUA relationship to grow?

 

A delegated underwriting authority relationship, or DUA, can only develop sustainably when there is technical alignment, transparency, data quality, and effective governance.

 

It is essential to have a clearly defined risk appetite, precise authority limits, documented underwriting guidelines, and permanent monitoring and control mechanisms.

 

We also require sufficient visibility into portfolio performance, accumulations, claims development, and any deviations from agreed parameters.

 

The delegated authority model can expand access to specialist expertise and distribution, but it must operate under rigorous standards of control, traceability, and accountability. For Active Re, the ability to scale a relationship depends on its technical performance and the quality of the collaboration, not solely on the volume generated.

 

How is Active Re incorporating artificial intelligence into its operations?

 

During 2025, we moved from the prototyping stage to the practical application of artificial intelligence across technical and operational processes.

 

By year-end, 50% of treaty technical accounts were being processed with the support of artificial intelligence. This has enabled us to accelerate information processing, improve the consistency of certain analyses, and free up time for tasks that require a higher degree of technical judgment.

 

Technology serves as a support tool. Critical decisions related to underwriting, risk appetite, accumulations, capital, and portfolio strategy remain subject to human oversight and accountability.

 

Our priority is not to implement technology for its own sake, but to apply it where it can generate measurable improvements while maintaining appropriate controls and safeguarding the confidentiality and security of information.

 

What will Active Re’s priorities be over the coming years?

 

Our priorities will be to maintain underwriting discipline, continue strengthening portfolio diversification, protect capital, and deepen our relationships with cedents, brokers, retrocessionaires, and strategic partners.

 

We will also continue developing our capabilities in treaty business, delegated authorities, retrocession, Alternative Risk Transfer, and technology applied to technical processes.

 

The coming years will be shaped by heightened competition, regulatory evolution, emerging risks, new sources of capital, and growing demand for specialized solutions. This environment will require agility, but also consistency.

 

We enter this next stage with a stronger balance sheet, a more diversified portfolio, and an international platform supported by 83 professionals, 628 cedents, 190 brokers, and a presence in 129 countries.

 

Our vision is to continue growing with selectivity, technical rigor, and a clear long-term perspective.

 

This article was initially released in Beinsure with the title, Reinsurers Rethink Growth as Pricing Discipline Tightens - Active Re.