Hannover Re set out its view of global reinsurance market in 2025. The group pointed to geopolitical tensions and ongoing conflicts weighing on marine and offshore energy lines.
Attacks on commercial ships in the Red Sea have had limited direct cost so far but underline war and terrorism exposures. Conventional shipping accidents also rose in early 2025, including incidents near India.
Despite those shocks, markets remain competitive. Renewals this year showed moderate rate cuts due to added capacity, though pricing still looks adequate. Hannover Re thinks the trend could carry into 2026 depending on claims.
Aviation reinsurance conditions are broadly stable. Proportional treaties show little movement, while some non-proportional contracts saw single-digit reductions.
The company noted that these tweaks don’t yet reflect outcomes from the Russian leasing losses ruling, whose financial impact is still unclear.
Airlines could benefit from improved primary insurance terms, while general aviation faces price declines. Product liability is steady, and space insurance has hardened after back-to-back large losses in 2023 and 2024, compounded by thin launch activity and small premium pools.
Hannover Re also highlighted continuing momentum in insurance-linked securities. The reinsurer placed 13 catastrophe bond deals worth $4bn in 2024 and has already completed seven more worth $2bn in the first half of 2025.
Those bonds cover risks from windstorms to earthquakes. In a first, Hannover Re partnered with North Carolina’s Insurance Underwriting Association and GC Securities to issue a bond that could fund homeowner resilience projects.
Investor appetite also extended to parametric cover. A cloud outage bond, first launched last year, returned at a larger volume, showing demand for structured non-traditional risks while giving cedants extra capacity.
Hannover Re plans to establish Hannover Re Capital Partners, a Bermuda-based underwriting agency. It will write non-proportional catastrophe reinsurance with backing from third-party capital, drawing on Hannover Re’s global client base.
The company said demand for structured solutions remains firm despite tougher competition. These tools, it argued, continue to help insurers manage solvency and smooth earnings volatility.
Executive board member Silke Sehm described the new resilience-focused cat bond as a model for future deals. “If we want to curb the costs of catastrophes, we must not only grow coverage but also fund adaptive measures”.
With this innovative cat bond, Hannover Re, in close cooperation with its partners, has brought a new feature to the insurance-linked securities market that for the first time provides funds to help build more disaster-resistant communities.
Silke Sehm, Executive Board member for property and casualty reinsurance
“If we want to effectively mitigate the costs of catastrophes, we must not only work on increasing coverage but also invest in adaptive measures. This placement combines both elements and should serve as a blueprint for more such transactions,” she said.
