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The global reinsurance sector has entered the second half of 2025 with strong momentum, driven by a potent mix of capital inflows, favourable underwriting conditions, and robust investor returns, according to reinsurance broker Guy Carpenter.
Despite ongoing global economic volatility and insured losses nearing $70 billion through the first half of the year, the renewal trends seen at January 1 have largely continued, according to Marsh McLennan’s global risk and reinsurance specialist.
Although the first quarter of 2025 saw elevated loss activity, driven largely by the $40 billion in insured losses from the Los Angeles wildfires, insured loss activity moderated in the second quarter. As a result, aggregate losses are now flat compared to the inflation-adjusted five-year average.
Despite these events, reinsurers absorbed the impact without meaningful capital impairment. The sector ended 2024 with a record $607 billion in capital, and growth of 5% to 7% is forecast by year-end 2025.
In addition, reinsurer returns on equity were reportedly 16% in 2024 and are projected to be 15% in 2025, while reinsurance capital closed 2024 at an all-time high of $607 billion.
Guy Carpenter anticipates seeing a continuation of this trend, with capital growth of 5% to 7% by year-end 2025.
Dean Klisura, President and CEO, Guy Carpenter, commented: “The current trading environment is one of the most favorable for reinsurers in many years, evidenced by the additional capital being attracted to the sector.
“We see this as a tremendous opportunity to re-balance the market dynamics in our clients’ favor. More capacity will continue to moderate pricing, give clients more diversification of reinsurance partners, and provide better solutions to protect earnings.”
“Reinsurers easily absorbed the 5% to 7% increase in client demand for property catastrophe limit. Moreover, reinsurer capacity exceeded demand by more than 20%, driving risk-adjusted rate decreases of 5% to 15% for non-loss impacted programs, and risk-adjusted rate increases of 10% to 20% for loss-impacted programs,” Guy Carpenter explained.
Against this backdrop, the insurance-linked securities (ILS) market, particularly catastrophe bonds, has shown remarkable resilience and scale.
Issuance so far in 2025, across 144A cat bonds and private cat bonds sat at over $17.56 billion for the first half of 2025, which is very close to the Artemis-tracked annual record of $17.7 billion from full-year 2024, as new quarterly issuance records were set in both Q1 and Q2 this year.
Download your copy of the new Q2 2025 Artemis cat bond market report here to read more.
In 2025, GC Securities, Guy Carpenter’s capital markets arm, has led the way with 23 catastrophe bond placements, more than any other broker in the market year-to-date. This level of activity underscores continued investor demand for structured reinsurance risk, particularly as underlying insurance market conditions remain stable and loss activity has normalised.
Shifting focus to casualty, Guy Carpenter reported continued discipline at the Spring 2025 renewals, with two factors helping drive more stable outcomes.
“First, reinsurers and clients evaluated trading relationships across property, casualty, and specialty programs. Reinsurers looked to find balanced support across all programs for a given client.
“Second, carrier underwriting actions have improved casualty economics for reinsurers, particularly proportional programs where insurers share ground-up premium and loss.
“As a result, through mid-year renewals, ceding commissions on proportional placements generally renewed flat to slightly down following 18-24 months of reductions. Excess of loss placements continued to face rate pressure as loss severity drives more volatility for reinsurers – generally rates increased 10-20%, although each renewal was highly customized based on the individual portfolio,” the broker concluded.
Read all of our reinsurance renewal news coverage.
Capital growth and pricing discipline drive stability at mid-year reinsurance renewals: Guy Carpenter was published by: www.Artemis.bm
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