Reinsurers are struggling to push through significant rate rises because investors in alternative capital are accepting lower prices, Fitch Ratings says.

Rates typically rise after significant catastrophe losses, but the April renewals suggest this has not occurred.

“Despite record catastrophe losses [last year], rate increases were modest and the softness of April renewals indicates price improvement may not be sustainable,” Fitch says.

“The influx of alternative capital limits cyclical price rebounds historically seen after periods of severe catastrophe losses.”

Intense competition and persistent low investment yields are other factors contributing to the sector’s negative outlook, the ratings agency says.