Autonomous, the financial research and analytics firm, said the reinsurance market is still soft, with solid profitability shaping renewal outcomes.
Reinsurers opened the year below expectations. January renewals came in a bit weaker than the market had pencilled in.
Even so, a mildly positive results season, paired with guarded investor sentiment, helped steady the sector. European reinsurers now sit broadly flat year to date, while Bermudan names average a 1.5% gain.
Autonomous said reinsurers have beaten wider sector indices on both sides of the Atlantic. It tied that performance to low-beta profiles, limited leverage, strong capital positions, and a benign loss backdrop during a rough equity market.
In Europe, reinsurers have outperformed the sector by 3% year to date on an unweighted basis. In the US and Bermuda, reinsurers have moved ahead of the US insurance index by 8%. A decent run, honestly, given the setup.
Autonomous said April renewals carried forward the buyer-friendly conditions seen in January. Property catastrophe rates fell by mid-to-high teen percentages, and in some cases those cuts stacked on top of reductions from the prior year.
Even with those declines, pricing still starts from elevated levels after the post-2022 reset. Brokers, according to Autonomous, do not view the current moves as irrational.
The pressure looks sharper in lower property layers. Autonomous said that also reflects ongoing growth in alternative capital, including insurance-linked securities.
Rate cuts have landed hardest in property and specialty lines. Casualty has stayed relatively stable. Autonomous also pointed to continuing uncertainty around aggregate and frequency protections, which shapes how losses move from primary carriers to reinsurers.
The firm said a benign loss environment, especially in natural catastrophe business, has supported current pricing trends. Strong capital buffers added to that support.
Geopolitical risks, including conflict in the Middle East, still hang over the market, though Autonomous said they have had limited effect on renewals so far and stayed mostly within specialty exposures.
Looking ahead, Autonomous warned that double-digit rate declines point to some easing in the period of supernormal profitability. Still, the firm thinks earnings remain strong enough to produce mid-to-high teen returns on equity.
Management teams have kept backing their earnings targets and their plans to add more buffers. April did not change that view in any material way.
Mid-year renewals, especially in US catastrophe business, are likely to draw closer scrutiny. Early signs suggest rate declines there might track the April pattern, helped by muted hurricane activity in 2025 and limited US mainland impact.
Autonomous also said the market will watch early slippage in excess-of-loss terms and conditions. That matters because the US has historically produced a large share of losses from severe convective storm activity, wildfire, and wind events.
The firm’s bottom line is pretty blunt. Conditions needed for a meaningful upward turn in pricing still look far off. Capital remains abundant, losses remain contained, and profitability stays high.
Autonomous said the clearest trigger for rate increases would be a major event draining market capacity. That would likely mean either a single catastrophe loss above $110 bn to $125 bn, or a cluster of extreme losses large enough to reset market behaviour.
