1/1 Reinsurance Renewals: Capacity Expands, but Underwriting Discipline Holds
Reinsurance renewals for 2025 reflect a shift in market conditions. Property reinsurance rates have softened, though profitability remains strong
Reinsurance Capital involves the financial resources used to support and back the reinsurance industry. It refers to the funds that reinsurance companies hold to cover potential claims and losses. This capital helps ensure that these companies can meet their obligations to their clients and maintain financial stability.
Reinsurance capital is crucial for managing risk. Reinsurers use it to absorb losses from large or unexpected claims, providing security for primary insurers. This financial buffer allows reinsurers to offer protection against high-risk events and ensures the overall stability of the insurance market.
The amount and quality of reinsurance capital can affect a company’s ability to take on new risks and expand its operations. Strong reinsurance capital positions enable companies to support more significant and diverse portfolios, while weaker capital may limit their capacity to provide coverage.
Understanding reinsurance capital helps evaluate a company’s financial health and its ability to manage large-scale risks. It also plays a key role in the broader insurance ecosystem by contributing to market stability and confidence.
Reinsurance renewals for 2025 reflect a shift in market conditions. Property reinsurance rates have softened, though profitability remains strong
Global reinsurers’ profitability will remain strong in 2025 despite lower risk-adjusted prices for most business lines when reinsurance contracts were renewed on 1 January
The insurance and reinsurance sectors face an expanding risk landscape, driven by critical challenges such as climate change and cyber threats
Changes to reinsurance-related capital requirements proposed by the Australian Prudential Regulation Authority strengthen Australian general insurers’ credit profiles
The International Association of Insurance Supervisors executive committee has approved a approved the final version of the global Insurance Capital Standard
In 2024, reinsurance premium rates increased, interest rates remained high, and capital markets performed well. The composite achieved its highest ROE in five years
Reinsurers are likely to push for double-digit increases in U.S. casualty premium rates during the January 2025 renewals. This move aims to address higher loss costs
More than 50% of the 81 respondents think global reinsurers will raise prices in January reinsurance 2025 renewals, continuing recent increases driven by high claims inflation
The positive reinsurance market outlook comes from de-risking as much as pricing with changes in terms and conditions, rising attachment points and tightening of wording
ILS market remains a significant capital source for reinsurers in 2024. Alternative capital estemated at $110 bn, with the catastrophe bond market growing to $45 bn
In 2024, global reinsurer capital, including both alternative and traditional sources, has reached peak levels. Reinsurer capital stood at $695 bn as of mid-2024, marking a $25 bn increase
While the reinsurance industry faces challenges, such as geopolitical and economic uncertainty, its biggest threat is losing relevance. 2024 has been another year of volatility
Global reinsurance market delivered strong results in 2024 with further improvement in underwriting profitability, exceptional ROEs and a continued building of capital
Aon estimates that global reinsurer capital rose by $25 bn to a new high of $695 bn over the three months to March 31, 2024
Mid-year reinsurance renewals have further consolidated the positive trends at 1/1 and 4/1, setting the stage for a more competitive reinsurance market in 2025
Florida’s reinsurance market, after three years of significant rate hikes, saw a pause in 2024. Reinsurers viewed the outcome positively
Insurance-Linked Securities Overview. Insurers and reinsurers leveraged alternative capital in 2023 more than any year in the history of the (re)insurance market
Reinsurance renewals conditions since 1/1 have continued to move in favor of reinsurance buyers. At the start of last year, property catastrophe capacity was constrained
Global Reinsurance market conditions since 1/1 have continued to move in favor of reinsurance buyers. Reinsurance renewals at April 1 consolidated the progress made at 1/1
Global reinsurance groups reported a significant improvement in underwriting profitability and ROEs in 2023
Reinsurance rate increases for property catastrophe business are likely to slow to below 10% on average when contracts are renewed in January 2024
Global reinsurance rate increases for property catastrophe business are likely to slow to below 10% on average when contracts
Ahead of the January 2024 reinsurance renewals, reinsurers’ overall appetite for US regional property catastrophe coverage remains healthy
Global reinsurance groups are cutting back on the cover they provide against medium-sized natural catastrophe risks due to investor pressure after several years
The emerging impacts of climate change are increasingly felt across the re/insurance industry, with much uncertainty ahead. But the industry now has a chance to transform