The Credibility Report
The weekly intelligence briefing for actuaries who move markets
US P&C insurers are set for their lowest combined ratio in over a decade—a decade-low 96.7% despite LA wildfire pressure—signaling disciplined underwriting in a softening market. Reinsurance pricing is falling faster than expected at January renewals, with Moody's calling it the steepest dive in over ten years as record capital floods the market.
Winter Storm Fern has driven billion-dollar losses across the US, while cat bond investors notched an impressive 11.6% return in 2025, keeping ILS appetite strong into the new year.
📰 Headlines
📊 US P&C Industry Set for Lowest Combined Ratio in Over a Decade
Triple-I and Milliman project the US property-casualty industry will achieve a combined ratio of 96.7% for 2025—the lowest in more than ten years—despite the LA wildfires. Disciplined pricing and favorable prior-year development are driving results that defied catastrophe headwinds.
Read more → Reinsurance News📉 Reinsurance Prices in Steepest Dive in Over a Decade
Moody's reports that record capital has pushed reinsurance pricing into its sharpest decline in more than ten years at January renewals. Cedants are winning significant rate reductions, with property cat softening expected to continue through April, June, and July renewals.
Read more → Insurance Business🌊 Winter Storm Fern: Billion-Dollar Losses Expected
UBS estimates Winter Storm Fern will cause billions in insured losses across the affected US regions. Swiss Re's analysis highlights how winter storm severity and duration are creating rising loss trends that require updated modeling assumptions.
Read more → Reuters📈 AXIS Reports Strong Q4 with 90.4% Combined Ratio
AXIS Capital delivered Q4 underwriting income up 42% to $184 million as its combined ratio improved to 90.4%. GWP showed healthy growth across specialty lines, demonstrating the underwriting discipline that has characterized top-tier carriers this renewal season.
Read more → The Insurer🏦 Marsh Revenue Climbs 10% in Strong 2025 Performance
Marsh McLennan reported a 10% revenue increase in 2025, reflecting robust demand for risk and insurance services across all divisions. The broker continues to expand its analytics and specialty capabilities as clients navigate increasingly complex risk landscapes.
Read more → Insurance Business📉 UnitedHealth Earnings Plunge 41%, Issues Soft 2026 Guidance
UnitedHealth Group reported a 41% decline in earnings and issued soft guidance for 2026, highlighting margin pressure from rising medical costs and regulatory headwinds affecting managed care economics.
Read more → InsuranceNewsNet🏛️ Pennsylvania Denies Hundreds of Millions in Rate Requests
Pennsylvania regulators have taken a hard line on P&C pricing, denying hundreds of millions in carrier rate requests. The regulatory pushback signals ongoing tension between insurers seeking adequate rates and consumer protection mandates.
Read more → Insurance Business🐊 RLI Trims Cat Reinsurance by $150M in 'Buyer's Market'
RLI Corporation reduced its cat reinsurance purchase by $150 million at January renewals, capitalizing on what it characterized as a "buyer's market" with favorable terms and pricing for well-positioned cedants.
Read more → Reinsurance News🌊 ILS Corner
Aon Cat Bond Index: 11.6% Return in 2025
The Aon catastrophe bond total return index delivered 11.6% in 2025—another strong year for ILS investors as spreads remained attractive and loss activity stayed within expectations for most tranches.
Read more → Artemis.bmNew Issuances This Week
Fidelis • US earthquake focus
TD Insurance • Canadian multi-peril
Hannover Re / Kaith Re • Private cat bond
Aetna • Health-related securities
GeoVera • US earthquake, lower pricing expected
Private ILS continues to offer better spreads than 144A cat bonds according to Schroders Capital, keeping sophisticated investors engaged with collateralized re structures.
🔬 Research Spotlight
Paper of the Month: A Deep Learning-Copula Framework for Climate-Related Home Insurance Risk
arXiv (January 2026) • Relevance Score: 36
This paper proposes a powerful two-step method combining deep neural networks with copula-based multivariate analysis to model how precipitation patterns affect home insurance claims. Using Canadian Prairies data from 2002-2011, the authors demonstrate that climate-linked claim dynamics can be captured more accurately than with traditional GLM approaches.
💡 Why actuaries should care: As extreme weather events intensify globally, this framework provides a practical blueprint for incorporating climate variables into property pricing and reserving. The copula structure captures dependent extremes—critical for modeling flood-drought correlations and compound events.
🔧 Technical innovation: The neural network handles the complex, non-linear relationship between weather inputs and individual claim propensities, while the copula layer captures spatial and temporal dependencies across the portfolio. This hybrid architecture preserves statistical interpretability while gaining predictive power.
Additional Papers This Week
Cross-line dependency modeling for joint reserve estimation and Solvency II capital.
NAAJ • Score: 32Parameter-free credibility methods for loss reserving.
Scand. Act. J. • Score: 27GLM-GBM bridge architecture for tabular pricing data.
arXiv • Score: 27Alternative VA pricing framework methodology.
Scand. Act. J. • Score: 26Interpretable ML for Solvency II capital requirements.
NAAJ • Score: 25Clustered catastrophe arrivals in collective risk models.
IME • Score: 25RL-based sequential reserve updating approach.
arXiv • Score: 18📚 From the Journals & arXiv
Flexible censoring in reserves using copula structures.
NAAJ • Score: 30Behavioral mortality research examining risk perception.
IME • Score: 27Tail risk quantification for systemic exposures.
EAJ • Score: 26Game-theoretic reinsurance design under ambiguity.
Scand. Act. J. • Score: 24Multivariate risk comparison methodology.
IME • Score: 24Extreme loss distributions with covariate effects.
IME • Score: 23Geographic mortality heterogeneity analysis.
NAAJ • Score: 23Market response patterns to catastrophic events.
JRI • Score: 22Pricing frameworks under uncertainty.
JRI • Score: 22Optimal transport methods for continuous-time reinsurance.
arXiv • Score: 19👀 What We're Watching
Moody's signals steepest price decline in a decade; watch April/June renewals for continued cedant wins.
UnitedHealth's soft guidance and Cigna's rebate headwinds may signal structural profitability reset.
Fern's multi-billion estimates could erode aggregate attachments on some cat bonds.
The deep learning-copula paper signals a maturing toolkit for actuaries modeling climate risk.
ML Reserving Morning
From Aggregate Claims Reserving to Individual Reserving
Speakers
Professor Dr Mario Wüthrich
ETH Zurich • Senior Scientific Advisor, InsureAI
Dr Ronald Richman
Founder & CEO, InsureAI
Details
- 📅 Tuesday, 10 February 2026
- ⏰ 7:30am Arrival • 8:00am Presentation • 9:00am Breakfast
- 📍 Melrose Arch, Johannesburg
- 🎟️ FREE (limited space)
Questions? info@insureai.co
The Credibility Report is published weekly. Forward to a colleague who prices risk.
— The Credibility Report
Edition 006 | Prepared January 30, 2026