The reinsurance market exhibited further signs of stabilization during the April 1, 2025, renewal period, according to Gallagher Re’s latest report, 1st View: Finding the Path. The report presents updated insights into property, casualty, and specialty reinsurance lines, capital trends, and market dynamics.
Property and Casualty Rate Trends
Gallagher Re reports that property catastrophe rate increases have slowed compared to previous renewal cycles, indicating a moderation after several years of hard market conditions. This reflects a significant shift in the insurance landscape, which has seen volatility since 2022.
In the casualty space, rate movements vary by segment. Some sectors are still under upward pricing pressure, while others have reached rate adequacy. These movements are influenced by factors such as claims inflation and evolving risk profiles.
Capital Growth and Market Capacity
The global reinsurance sector has reached a record traditional capital high of USD 655 billion, driven by strong reinsurer performance in 2023 and 2024. This capital growth has provided increased capacity and optionality for reinsurance buyers, supporting a more stable environment across different geographies, strategies, and classes of business.
Reinsurers expect favorable underwriting results in 2025 and are forecasting double-digit returns on equity, assuming natural catastrophe losses remain within budgeted expectations.
Alternative Capital and ILS Trends
Alternative capital continues to play a growing role in market dynamics. The report cites increases in non-life catastrophe bond capacity, including both issued and outstanding bonds. Metrics such as the weighted average discount margin and expected loss indicate a balanced risk-reward profile for insurance-linked securities (ILS) investors.
Investor interest in ILS remains strong, as reflected in year-end 2024 assets under management. This sustained engagement supports competition and contributes to the moderation of traditional reinsurance pricing.
Developments in Specialty Lines
Specialty reinsurance sectors — such as marine, aviation, and specialty property — have experienced selective rate movements based on loss histories and available capacity. These sectors are adapting in response to the global risk environment.
Regional and Market Insights
Gallagher Re notes that market softening has accelerated in Japan. Other regional markets are experiencing varying degrees of stabilization or rate moderation, depending on specific exposures and underwriting trends.
The report also outlines recent shifts in the primary insurance market and comments on shareholder return expectations across the reinsurance sector.
Outlook for the Remainder of 2025
“With significant underwriting actions having been taken in recent years, the property risk and casualty placements proved more attractive compared with recent prior renewals and therefore required less leverage across the large cat programs in order to complete these placements,” said Tom Wakefield, CEO of Gallagher Re.
He further stated that, barring major unexpected events in 2025, the global market’s approach to differentiated, risk-adjusted rate reductions is likely to continue — and may accelerate.
Despite increased capital availability, reinsurers are balancing the opportunity to deploy this capital with the need to avoid broad, undifferentiated rate reductions.
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