Design Highlights
- Increased global reinsurer capital, reaching $760 billion, enhances competition and drives down rates for buyers.
- Profitable underwriting practices and strong returns-on-equity of 17% foster a buyer-friendly environment.
- Double-digit rate reductions for preferred risks during renewals reflect a shift favoring buyers in pricing dynamics.
- Insured catastrophe losses being 18% below the five-year average allow reinsurers to offer larger capacities.
- Retained earnings and excess capital provide reinsurers with the ability to offer competitive pricing and improved coverage.
In 2025, reinsurance buyers are feeling like they just won the lottery. Seriously. With global reinsurer capital skyrocketing to $720 billion in early 2025 and climbing to a jaw-dropping $760 billion by September, it’s hard not to feel lucky. That’s a hefty $45 billion increase year-over-year. Who wouldn’t want a piece of that pie? The numbers don’t lie: dedicated reinsurance capital grew by 9% globally this year.
And guess what? Two-thirds of tracked reinsurers are seeing double-digit returns on equity. That’s the kind of profit margin that would make anyone giddy.
Reinsurers are doing so well that their share of industry losses has dropped to just 11% in 2025, compared to a hefty 20% pre-2023. Insured catastrophe losses? They hit $121 billion—18% below the five-year average. So, what’s the secret sauce? Well, a combination of excess capital and profitable underwriting has created a growth appetite, as reinsurer returns-on-equity are estimated at 17% for 2025.
Reinsurers are thriving, slashing their industry loss share to 11% while enjoying a growth-driven cocktail of capital and smart underwriting.
Reinsurers are basically swimming in retained earnings, which is fueling their capital growth, even amidst trade tensions.
Then there’s the whole pricing situation. At the January 1 renewals, buyers got to bask in the glory of double-digit rate reductions for preferred risks. The U.S. property catastrophe rate-on-line index took a nosedive, falling by 12%. In the Asia Pacific, rate reductions were nearly 20% for accounts that didn’t suffer losses. It’s a buyer’s market, folks.
By mid-year, the shift to buyer-friendly conditions was in full swing. The competition? Intense. Buyers now command lower rates and bigger capacities across the board, from the U.S. to Europe and Latin America. Insurers are practically rolling out the red carpet, thanks to abundant capacity driving down prices and expanding coverage for those with strong loss records. Significant renewal periods in June and July were critical for U.S., Latin America, Australia, and New Zealand.
But it’s not all sunshine and rainbows. The market is bifurcated—strong performers are reaping the benefits, while others are left with tighter terms and higher pricing. The casualty facultative markets are getting a bit tighter, too. Evaluating financial stability of reinsurers remains essential when selecting partners in this competitive environment. Yet, buyers are still comfortable with their protection and are looking for more solutions for 2026 growth.
Looking ahead, three-quarters of buyers are anticipating more price declines in property reinsurance for 2026. And with a solid foundation of capital and investment income, it seems like the reinsurance landscape is only getting better.
