Reinsurer return on equity is estimated to be 17%, with dedicated reinsurance capital growing another 9% in 2025. Insured catastrophe losses are estimated to be $121 billion in 2025, 18% below the five-year inflation-adjusted average, but what contributed to higher reinsurer returns was their lower share of these events of 11% in 2025, versus 20% prior to the market shift in 2023. Excess capital positions, profitable underwriting results, and property reinsurance rates all drove reinsurers’ appetite for growth.
For property catastrophe placements, cedants were able to achieve double-digit risk-adjusted rate reductions for non-loss impacted programs. In addition, reinsurance buyers sought better risk sharing, such as aggregate and catastrophe quota shares.
Dean Klisura, President and CEO, Guy Carpenter, said: “Despite global trade tensions and increased regulatory scrutiny, reinsurers have grown capital due largely to strong retained earnings. This has allowed clients to benefit from lower prices and a wider range of innovative solutions to meet their rapidly evolving needs.”
Investor appetite for insurance-linked securities (ILS) also contributed to softer property market conditions. Catastrophe bond issuance continued to reach all-time highs with total notional outstanding limit exceeding $58 billion, including 15 first-time sponsors in 2025.
Casualty reinsurance renewals had nuanced outcomes based on region, structure, historical results, and the scale of the outwards portfolio. Generally, program renewals were stable with some cases of improvement for clients with proportional structures who demonstrated portfolio discipline and strong overall performance. Clients continued to look for reinsurers to support treaties across lines of business. Guy Carpenter continues to utilize proprietary casualty data to differentiate insurer portfolio management, including disciplined limit deployment, ensuring rates keep pace with loss trends, and maintaining adequate reserves. Sidecars continued to become more prevalent across multiple lines of business, in particular for longer-tail portfolios.
The cyber market continues to evolve from quota share and aggregate protection to treaties with specific event, risk, and hybrid designs.
Reinsurance in all forms is being utilized by cedents as a strategic growth tool. Guy Carpenter’s broking, analytics, advisory and capital teams are focused on delivering enhanced value to clients through all aspects of growth capital and volatility management.
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