Insurers secured improved pricing, broader coverage, and more flexible terms at the June/July 2025 reinsurance renewals, amid rising global capital and strong competition among reinsurers, according to Aon. The new report, titled ‘Reinsurance Market Dynamics Midyear 2025 Renewal’, reveals that global reinsurance capital rose to US$720 billion by the end of Q1 2025, up from US$715 billion at the close of 2024. The growth was driven by retained earnings among established reinsurers, despite elevated natural catastrophe losses in the first half of the year. Reinsurers, insurance-linked securities (ILS) markets, and new entrants actively deployed capacity, intensifying competition and creating favourable conditions for buyers. This resulted in expanded terms and options to purchase broader cover, though renewal outcomes varied based on individual loss experience and programme performance. Catastrophe bond issuance hit a record US$16.8 billion in the first half, including the two largest transactions in the market’s history, each exceeding US$1.5 billion. Demand for cover rose by 10 per cent across all regions, influenced by inflation, model changes and shifting views on natural catastrophe risk. Depopulation of Florida’s Citizens Property Insurance Corporation was a key driver of increased demand in the US, alongside recent wildfire and flood events that reshaped risk assessments. Property catastrophe reinsurers responded with greater flexibility, broader offerings, and willingness to take on lower programme layers. Casualty insurers also entered renewals from a strong position, supported by years of pricing discipline and underwriting action. While some reinsurers reduced exposure to parts of the US casualty market, others increased their participation, resulting in stable capacity overall. Reinsurers remain cautious on nuclear verdicts, reserve development and emerging risks, but see upside in strong pricing and the potential for tort reform. Steve Hofmann, US CEO of Reinsurance Solutions at Aon, said the market “creates opportunities for insurers to address specific issues, or to adjust programme structures and coverage to reduce volatility in both property and casualty,” while reinforcing the long-term partnerships needed to drive innovation and stability in the sector.
