Category: Reinsurance renewals

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Abundant capacity and increasing competition among reinsurers are leading to softer pricing during the June and July renewals, which supports Fitch Ratings’ expectation that market pressures will persist in affecting prices even after the peak in 2024.

As per Fitch, pricing across most reinsurance lines continued to gradually fall at the mid-year reinsurance renewals, just like it had at both the January and April renewals, while rates for loss-free property programmes fell by 10%-15%.

Considering this, Fitch has suggested that declining prices, increased claims severity from natural catastrophe events, and slightly looser terms and conditions in property lines are likely to lead to lower underwriting margins in 2025.

Of course, underwriting margins have been under pressure from sustained price erosion and increased claim severity, most notably from the Los Angeles wildfires and other natural catastrophe losses seen throughout the first half of 2025.

The agency states that the global reinsurance market has ample capacity as rising supply outpaces incremental demand from cedants, which according to the agency, is shifting pricing power to be in favour of reinsurance buyers, particularly in property lines, while the balance remains more even in casualty.

“Competition is generally focused on price rather than T&Cs. Property reinsurance revenue growth is underpinned by increased risk awareness among cedants and higher insured values, leading to increased coverage. Reinsurer appetite to write US casualty cover is mixed, with some reinsurers increasing their appetite and others withdrawing,” Fitch commented.

Furthermore, Fitch states that T&Cs are beginning to loosen as reinsurers become more willing to provide protection lower down on programmes, including at lower attachment points and for more frequent return periods.

“Working-layer and aggregate reinsurance protection are making a comeback, and reinsurers are becoming more open to negotiating T&Cs,” Fitch added.

“The first signs of less stringent T&Cs are emerging, driven by heightened competition and a very gradual relaxation of underwriting discipline.”

Despite this, Fitch noted that pricing remains above historical levels, and sector fundamentals still support strong, albeit off-peak, profitability.

Furthermore, Fitch confirmed that it will review its global reinsurance sector outlook ahead of the reinsurance industry’s annual Rendez-Vous de Septembre gathering in Monte Carlo. The sector outlook is currently ‘neutral’.

Read all of our reinsurance renewal news coverage.

Abundant capacity & competition puts further pressure on reinsurance prices: Fitch was published by: www.Artemis.bm
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GC Securities, the investment banking and capital markets unit of reinsurance broker Guy Carpenter, worked on a record number of catastrophe bonds in the first-half of 2025, according to the broker’s CEO Dean Klisura.

Speaking today during a second-quarter earnings call for parent company Marsh McLennan, Guy Carpenter CEO Klisura explained that the reinsurance broker’s strong growth was helped by the high levels of activity seen in the catastrophe bond market, as well as across insurance-linked securities (ILS) and third-party capital raising.

Earlier in the earnings call, John Doyle, President and Chief Executive Officer of Marsh McLennan, mentioned the catastrophe bond market’s accelerated level of activity in 2025.

Doyle commented on Q2 activity for the broker, “A moderate increase in client demand was offset by reinsurers increasing capacity, as well as increased cedent cat bond issuance.

“The cat bond market is on pace for a record year of issuance, with over 50 new bonds in the first-half, involving approximately $17 billion of limit.”

Later in the call, Guy Carpenter’s CEO Klisura went into more detail.

He explained, “New business is very strong, it’s strong, and it’s balanced across our platform.

“As John noted, significant ILS activity, with record cat bond growth in the quarter. Guy Carpenter participated in 14 cat bond issuances in the quarter and 23 year-to-date, which is a record for Guy Carpenter.”

Here, we assume, Klisura is referring to the GC Securities unit’s activities in the catastrophe bond market, where it is one of the leading structuring, arranging and bookrunning specialists for cat bond issuances.

Looking at the Artemis leaderboard of catastrophe bond banks and brokers, GC Securities currently sits in second place, with an impressive over $21.72 billion of cat bond risk capital currently outstanding that the unit has worked on.

That risk capital outstanding comes from currently 87 outstanding cat bond deals we’ve tracked that GC Securities has provided its services to.

Looking back roughly one year, around the mid-point of 2024 GC Securities was associated with just over $16.22 billion of outstanding cat bonds from our Deal Directory from 72 deals.

So, over the last year the figure has jumped by $5.5 billion in risk capital outstanding and 15 more cat bond transactions, as GC Securities has expanded its business alongside the recent cat bond market growth spurt.

Klisura also referenced some of the Guy Carpenter Capital Advisory services, including where it assists re/insurers in raising third-party capital, often for reinsurance purposes just as much as for more traditional capital raising needs.

Klisura said, “We continue to see new opportunities in our capital and advisory practice. In the quarter, we won several mandates to raise third-party capital for clients large and small in the US and London, a number of well known MGAs in particular. And we’re winning M&A mandates, providing M&A advice and supporting activities for a number of those clients.”

Finally, Klisura also highlighted that despite demand for property catastrophe reinsurance easing up at the mid-year renewals, Guy Carpenter placed more limit for its clients.

“Property cat demand did ease up at the mid-year renewal. We sold an additional $5 billion of property cat limit through the mid-year renewals, helping to drive the drive the top line and we feel really good about our talent,” Klisura said. “As John noted, we’re attracting top talent in the market, and we’ve got a great, balanced organisation. We feel good about our prospects.”

GC Securities worked on record number of cat bonds in H1 2025: Guy Carpenter CEO Klisura was published by: www.Artemis.bm
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US primary insurer Travelers has renewed substantially the same of its largest catastrophe reinsurance arrangements at the mid-year renewal season, although with some changes and a broadening of another of its covers, and perhaps a non-renewal of smaller treaties, while for the second year running the company has lifted its catastrophe bond attachment higher up the tower again.

Earlier this year, Travelers increased the amount of protection it receives under its main occurrence catastrophe excess-of-loss (XoL) reinsurance treaty to $3.675 billion at the January 1st renewals, with a higher attachment.

Last July, after the mid-year 2024 reinsurance renewals, the insurer had purchased more northeast catastrophe reinsurance protection.

At the same time Travelers lifted the attachment point for its $575 million Long Point Re IV Ltd. (Series 2022-1) issuance from May 2022 by just over $300 million.

Now, at the mid-year of 2025, Travelers has renewed the same catastrophe reinsurance arrangements as last year, with the few changes detailed below, but further lifted the cat bond’s attachment point at its 2025 annual reset.

Travelers has renewed its Northeast Property Catastrophe Excess-of-Loss Reinsurance to provide the same $1 billion of coverage, from the same $2.75 billion retention to run through the end of June 2026.

The company notes that, “Recoveries under the catastrophe bonds (if any) would be first applied to reduce losses subject to this treaty.”

Also renewed for the next year is Travelers Personal Insurance Catastrophe Excess-of-Loss Reinsurance Treaty that covers specific named storm and hurricane exposures across United States coastal states from Texas to Maine, but excluding Florida, but now also covers all other perils as well..

For the 2024 hurricane season this reinsurance treaty only covered that peril and was renewed to provide $500 million of cover across a $1 billion layer for a single event, subject to a higher $2 billion retention.

For 2025, this treaty has been renewed at to provide much broader coverage, as far as we can see, while the retention has halved to $1 billion.

Alan Schnitzer, Travelers CEO said during an earnings call today, “You may recall that last year’s treaty had an attachment point of $2 billion. While in a modelled year we wouldn’t expect this to have much of an impact, given the prospect of continued weather volatility, we were pleased to obtain broader coverage at a reasonable cost.”

One other notable change to this renewal is that Travelers has not reported that its Middle Market Earthquake Catastrophe Excess-of-Loss Reinsurance Treaty has been renewed. This treaty was renewed a year ago and covered a one-year term to June 2025. So it appears the company may have non-renewed it this year, perhaps due to its other treaties having all grown to provide more reinsurance protection in recent years.

The companies Canadian Property Catastrophe Excess-of-Loss Reinsurance Treaty, has been adjusted to provide more coverage, now attaching at C$100 million but covering all losses up to C$400 million, where as a year ago it only covered a 50% share of losses between C$100 million and C$200 million, but then 100% of losses up to C$500 million.

So some adjustments there for this smaller treaty, which now covers more losses from the retention up.

Onto the Long Point Re catastrophe bond, which a year ago saw its attachment point lifted to provide its $575 million of cover after a $2.79 billion retention, up from a $2.48 billion retention the year prior.

Now, after the mid-year 2025 annual reset, Travelers Long Point Re cat bond will attach from a $2.89 billion retention.

Travelers has continued to adjust its catastrophe reinsurance, growing its larger and more expansive treaties, while making smaller ones more focused, while the cat bond remains a core component of its arrangements.

Read about Travelers second-quarter 2025 results over at our sister publication Reinsurance News.

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You can now watch the full replay of our recent Artemis Live webinar, Catastrophe Bond and ILS Market Conditions at Mid-Year 2025, from which you can gain insights into the state of the market and expert opinion about renewal outcomes for the insurance-linked securities (ILS) market, as well as an outlook for the rest of the year.

Our “Catastrophe Bond and ILS Market Conditions at Mid-Year 2025” live webinar was held on June 17th 2025 and featured catastrophe bond and insurance-linked security (ILS) industry experts that joined us to discuss the state of the market around the middle of the year. This webinar was held in partnership with Computershare Corporate Trust.

While our expert speakers explored the fact the ILS market has become a foundational component for many reinsurance and retrocession buyers, occupying an increasingly large share of some towers, they also highlighted an expectation that growth of the asset class continues.

This Artemis Live webinar was moderated by Steve Evans and featured participants:

• Paul Schultz, Vice Chairman, Aon Reinsurance Solutions;
• Jennifer Montero, Chief Financial Officer, Citizens Property Insurance Corporation;
• Stephen Velotti, CEO and CIO, Pillar Capital Management;
• Michael Alfano, Vice President, Business Development Officer, Computershare Corporate Trust.

Our speakers discussed the state of the market around the mid-year renewals, how investors have responded to the robust levels of catastrophe bond issuance activity in 2025, the ability of the market to continue meeting sponsor needs, as well as the outlook for the rest of the year.

Watch the full video to gain insights on what matters at the mid-year point of 2025 for the catastrophe bond, insurance-linked securities (ILS) and reinsurance capital market.

The  webinar video is embedded below and can also be viewed, along with previous Artemis Live video interviews, on our dedicated video page.

You can also listen in audio to all of our interviews by subscribing to the Artemis Live podcast here.

All of our Artemis Live video interviews have a focus on reinsurance, ILS and the efficiency of risk transfer and can be accessed here.

Video: Catastrophe Bond and ILS Market Conditions at Mid-Year 2025 webinar was published by: www.Artemis.bm
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The supply-demand balance for global non-marine retrocession continued to tilt in buyers’ favour, as cedants were presented with opportunities to expand their retro purchases at the mid-year reinsurance renewals and some market participants took a commercial view on collateral trapping, according to Gallagher Re.

As per the reinsurance broker’s 1st View report, occurrence retrocession excess of loss limits were broadly up at the renewals, alongside a notable increase in the number of aggregate and frequency covers being explored and purchased, with buyers aiming to manage frequency risk across the second half of 2025.

“Market supply remained adequate, as reinsurers’ growth ambitions combined with increasing confidence in California wildfire reserves to drive increased appetite from incumbent markets,” Gallagher Re added.

The broker noted that trapped collateral stemming from the California wildfires had limited influence on mid-year renewal outcomes.

Gallagher Re said that several buyers chose to take a commercial approach to the rolling of collateral.

This commercial approach to collateral trapping can benefit both the buyer of retrocessional protection and the ILS fund or capital manager deploying the capacity.

It can enable collateral to be re-used more efficiently, providing continuity for buyers, while allowing the source of trapped collateral, often insurance-linked securities (ILS) fund managers, to better manage their fund capacity through the renewal season.

Given the long-standing relationships buyers often have with retrocessionaires, it makes sense to take a commercial view on trapping. Being pragmatic, about the need to trap versus rolling collateral, can result in more benefits and stronger relationships over the long-run.

Gallagher Re also said that occurrence excess of loss purchases continued to take priority over indexed products at retro renewals, but noted that the industry loss warranty (ILW) market became increasingly active in the lead-up to the Atlantic hurricane season.

Furthermore, risk loss-free reinsurance rates for global non-marine retrocession were renewed -5% to -10% at the mid-year renewals, while catastrophe loss-free rates decreased -5% to -15%.

As well as this, Gallagher Re also highlighted that a significant softening in the catastrophe bond market, coupled with increased supply, further pushed down pricing for tail-exposed excess of loss covers, including some softening in minimum rates-on-line.

Finally, the broker also reported an uptick in demand for secondary peril covers on an indexed basis, an area where greater appetite continues to be shown.

Read all of our reinsurance renewal news coverage.

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Reinsurance broker Guy Carpenter has updated its property catastrophe reinsurance rate on line indices today and the latest data shows that after the April and mid-year renewals, property cat reinsurance rates have fallen 8.1% globally, 6.7% in the United States and a more significant 15.9% in the Asia Pacific region.

Recall that, these indices for property catastrophe reinsurance rates and pricing largely fell at the start of the year.

The January 2025 declines were the first since 2017 for all of the indices, except for Asia Pacific, where after a rebasing and re-evaluation of the data for the rate-on-line (RoL) Index for that region, Guy Carpenter’s data showed a decline occurred there in 2024 as well.

Now, the declines have continued and accelerated in all cases after Guy Carpenter has incorporated the market data from the mid-year June and July reinsurance renewals into its indices.

First, the Guy Carpenter Global Property Catastrophe Rate on Line Index, which is its proprietary index of global property catastrophe reinsurance Rate-on-Line movements, on brokered excess of loss placements, that has been maintained by the broker since 1990.

The Global Property Catastrophe Rate on Line Index fell by 6.6% at the January 1 2025 renewals, which was its first decline since 2017.

Now, after including market data from the mid-year renewals, this Global index is now down 8.1% for 2025 to-date.

Despite these declines, this Global index of property catastrophe reinsurance rates and pricing is still higher than all years running from 2006 to 2023.

Notably, this Index of global property catastrophe reinsurance pricing is still 57% higher than its last low in 2017, reflecting still strong and attractive pricing in reinsurance.

Alongside the firm terms, conditions and attachments, this is why catastrophe reinsurance remains so attractive at this time, despite now two years of softening from its highs.

You can analyse the Guy Carpenter Global Property Rate on Line Index using our interactive chart:

Next, the Guy Carpenter U.S. Property Catastrophe Rate on Line Index, which measures US property catastrophe reinsurance Rate-on-Line movements, on brokered excess of loss placements, and tracks the data back to 1990 as well.

This index for United States property catastrophe reinsurance rates and pricing had fallen by 6.2% at 1/1 2025, which was the first decline for this index since 2017 as well.

Now, following the 6/1 and 7/1 reinsurance renewals at the mid-year, the Guy Carpenter U.S. Property Catastrophe Rate on Line Index is down a little further at a 6.7% decline for 2025 so far.

For this US index of property catastrophe reinsurance rates, the Index is still up by a significant 93% since its low in the soft market year of 2017.

You can analyse the Guy Carpenter U.S. Property Rate on Line Index using our interactive chart:

Turning to the Asia Pacific region, Guy Carpenter’s APAC property catastrophe reinsurance rate-on-line index tracks the same property catastrophe reinsurance Rate-on-Line movements, on brokered excess of loss placements, for this part of the world.

In Asia Pacific (APAC), property catastrophe reinsurance rates fell by 7.2% at January 1st 2025. As we explained, the APAC index had been rebased by Guy Carpenter to show it had declined for full-year 2024 as well.

Including the April reinsurance renewal data, as of July this APAC property cat ROL index is now down by 15.9% in 2025.

Since its most recent low, this APAC index of property catastrophe reinsurance rates on line is now only up by 19.5% since 2018.

You can analyse the Guy Carpenter Regional Property Rate on Line Index using our interactive chart:

Guy Carpenter explains on its Indices, “Rate on line (ROL) is the cost of reinsurance per dollar of limit. The calculation of ROL is reinsurance premium as a percentage of limit. Each Guy Carpenter ROL index is a measure of the change in dollars paid for coverage year on year on a consistent program base. Each index reflects the pricing impact of a growing (or shrinking) exposure base, changes in buying habits and the way risk is measured, as well as changes in market conditions. Unlike risk-adjusted measurements, each index is not dependent on the model or method used to measure the amount of perceived risk in a program, which can vary widely.”

Overall, property catastrophe reinsurance rates-on-line are still sitting at attractive levels, especially for the United States and other regions, while APAC has clearly softened fastest but remains well above its last trough.

Combined with the changes to attachments and terms that have proven to be sticky, this can still make for a very profitable environment to enter the reinsurance market for capital providers and investors.

Read all of our reinsurance renewals coverage here.

Property cat rates down 8.1% globally, 6.7% in US, 15.9% in APAC in 2025: Guy Carpenter was published by: www.Artemis.bm
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Despite the fact property catastrophe reinsurance rates have moderated somewhat, analysts at Jefferies said the market remains attractive and they do not classify it as soft given pricing remains above 2022 levels at this time.

Commenting on the property catastrophe reinsurance market after the mid-year 2025 renewals, the Jefferies equity analyst team highlight the influx of capital that helped to moderate pricing and make renewal outcomes more favourable for buyers.

“Increased capital deployed outpaced rising demand (estimated at ~10% increase in limit purchased) as increased capacity from newly formed reinsurers/syndicates/ILS funds more than offset incremental purchasing by cedants,” the analysts explained.

They highlight the very strong catastrophe bond issuance seen to-date, which as we explained recently has led to a new annual record being set by Artemis’ data.

Larger transactions and new sponsor entrants have helped to drive the catastrophe bond market to its record highs, but the Jefferies analyst team also think pricing remains attractive here despite some softening being seen.

“Despite larger transactions and new entrants in the market, CAT bond spreads, or pricing, have come in slightly since 1Q25 but are stable with 4Q24,” they explained.

While rates-on-line have fallen across many catastrophe reinsurance renewals this year, the analysts continue to see value in the sector for underwriters.

“Despite moderating rates, we believe property CAT returns remain attractive and do not view the market as soft given pricing is above 2022 levels,” the Jefferies team wrote.

Adding that, “Further, returns in Florida remain favorable despite pricing pressures relatively recent given tort reform.”

Jefferies analysis aligns with our recent article on a Peel Hunt report, which concluded that the inflection point into a full soft reinsurance market remains two to three years away.

Read all of our reinsurance renewal news coverage.

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News continues to emerge that reflects the increased availability of aggregate reinsurance protection, as an analyst report shows Italian insurance and financial services group Unipol secured a planned €300 million aggregate reinsurance treaty to better protect it against smaller catastrophes and weather losses.

Aggregate catastrophe protection, to provide reinsurance for smaller catastrophe and weather losses on an accumulating loss basis, has been a more challenging product to source for a few years.

As the reinsurance market hardened after 2022, appetite to deploy limit to cover aggregate losses diminished, while the cost of aggregate reinsurance and retrocession covers also rose.

But, in 2025, these covers have become more available and affordable as well, with the catastrophe bond market one leading source of annual aggregate protection once again.

While at the same time, European protection buyers have also found reinsurers and ILS capital more accommodating for buying aggregate reinsurance from.

We reported back in May that during an earnings call General Manager of Insurance at Unipol, Enrico San Pietro, said that the company was aiming to buy a new aggregate reinsurance arrangement this year.

Now, in an analyst report from Berenberg, details of that purchase have been revealed.

The Berenberg analysts, after holding a speed-dating event with numerous re/insurers present, explained that Unipol executives said that the aggregate cat reinsurance cover will provide €300 million of limit.

The agreement was signed in May and attaches once aggregate losses surpass a €350 million retention, it is reported.

It’s also said that the aggregate cover only protect Unipol for weather and catastrophe events that cost it less than €100 million, while its main catastrophe reinsurance treaty will continue to provide the protection for larger events than that.

The Berenberg analysts report that Unipol’s new aggregate reinsurance treaty covers weather and smaller cat losses to both its motor and non-motor books of business.

While this is further evidence of the appetite to deploy capacity to aggregate covers recovering, other companies at the Berenberg event highlighted that capital remains disciplined, with high deductibles enforced and only relatively low limits available.

Aggregate reinsurance and retrocession has always been considered more of an earnings than capital cover, protecting the ability of re/insurers to hit their profit targets even when frequency loss events are prevalent throughout the financial year.

As a result aggregate protection remains a very attractive buy and we’ve seen plenty of aggregate cat bonds issued this year, especially in industry-loss trigger retrocessional form for large reinsurance companies.

We’ve also reported on aggregate reinsurance purchases that have come to light from global insurer Zurich and Bermuda-based reinsurance firm Conduit Re.

In the outstanding catastrophe bond market, just under 40% of limits currently at-risk are deployed to provide aggregate reinsurance protection.

But in the last few months, the prevalence of aggregate deals has increased a little, further signalling recovering appetites to deploy capacity and capital to these opportunities, which is being supported by attachments and prices remaining relatively stable and attractive still.

Of course, the greater availability of aggregate reinsurance has been a trend we’ve followed for some months, with notably more reinsurance capital available to support well-structured aggregate deals towards the end of 2024, which led reinsurance buyers to become more hopeful as we moved towards 2025.

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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.

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A wave of alternative capital, led by a record-setting surge in catastrophe bond issuance, helped reinsurers meet growing demand without pushing prices higher at the July 1 renewals, according to Gallagher Re, as cedants secured improved terms in property and specialty lines.

While traditional reinsurance capital reached a new high of $769 billion at year-end 2024, Gallagher Re’s latest 1st View report highlights the critical role of insurance-linked securities (ILS) and cat bonds in sustaining competitive pressure through mid-2025.

Issuance so far in 2025, across 144A cat bonds and private cat bonds we’ve tracked, 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.

According to Gallagher Re, this wave of transactions, driven by strong investor demand and sponsor confidence, ultimately helped reinsurers meet increased demand without pushing prices higher.

Commenting on the July 2025 reinsurance renewals, Tom Wakefield, CEO Gallagher Re, said: “Buyers generally experienced a more competitive reinsurance market at the July 1 renewal compared to recent years, with capacity available even where demand increased, and reinsurers looking to grow.

“Clients were largely able to secure risk-adjusted rate reductions for property treaties and were well-placed to hold pricing broadly flat in casualty lines – in part, as underlying pricing increases continue to flow through to reinsurers.

“With these conditions in place, clients had the opportunity to challenge the status quo, and secure improvements to the structure and terms of their property and specialty reinsurance programs.”

Reinsurers entered the July renewals in “good financial shape” Wakefield noted, with strong 2024 results and ROEs well above the cost of capital.

“Q1 results were weaker due to the impact of January’s unprecedented wildfires in Los Angeles, California, but barring further exceptional cat events, reinsurers remain on track for another good year overall,” Wakefield added.

“As noted in Gallagher Re’s Reinsurance Market Report in April, reinsurers are currently on track to deliver healthy ROEs in the mid-teens for 2025, with traditional reinsurance capital set to increase by another 6% (assuming average results for the rest of the year).”

Despite these fundamentals, cedants achieved risk-adjusted rate reductions of 10–15% on average in property catastrophe programs, particularly for loss-free or structurally enhanced portfolios.

“The increase in reinsurance dedicated capital has been driven mainly by retained earnings at the traditional reinsurance groups, rather than new entrants or capital raises.” Wakefield added.

“We are also collaborating with clients to utilize non-traditional capital vehicles, such as sidecars, where interest in accessing insurance risk remains robust.”

While traditional capital hit new highs, it was the alternative capital layer that gave buyers greater flexibility, helping maintain competitive tension and push back against previously hardened terms.

The cat bond market remained highly efficient, with a Q2 weighted average upsize at 27% indicating investor oversubscription, and a steady market multiple of 3.09, even amid increased issuance.

“The influx of deals in Q2 has been met with ample investor capital, with sponsors continuing to experience deal-upsizes and spread reductions,” Gallagher Re explained.

Gallagher Re also highlighted a 10% increase in property cat sidecar market size since the start of the year and noted that casualty sidecars are gaining traction, with several new entrants accessing the structure in H1.

This marks a growing willingness among ILS investors to engage with more complex and diversified risks outside the traditional property catastrophe space.

Looking ahead, Gallagher Re explained that 2025’s renewals are showing a consistent trend: a market in which the balance of supply and demand has tilted back toward reinsurance buyers.

Reinsurers are increasingly looking to deploy their significant capital, but they remain disciplined in their approach.

Wakefield, added: “Buyers generally experienced a more competitive reinsurance market at the July 1 renewal compared to recent years, with capacity available, even where demand increased, and reinsurers looking to grow.

“With these conditions in place, clients had the opportunity to challenge the status quo, and secure improvements to the structure and terms of their property and specialty reinsurance programs.”

Read all of our reinsurance renewal news coverage.

ILS drives structural flexibility and softer pricing at July renewals: Gallagher Re was published by: www.Artemis.bm
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