Global reinsurance market holds steady in 2025 renewals, Euler ILS reports

Pricing remains near historic highs, with regional variations based on recent loss activity

Global reinsurance market holds steady in 2025 renewals, Euler ILS reports

Reinsurance

By Kenneth Araullo

The Janu. 1 renewal period remains a critical point for the global reinsurance market, accounting for a significant portion of annual capacity allocation.

According to Euler ILS Partners, the 2025 renewals reflected overall stability in contract terms, alongside moderate reductions in rates for property catastrophe reinsurance and retrocession markets.

This trend was particularly notable in regions that did not experience recent losses, including parts of the US, Europe, and Asia-Pacific. Despite some rate decreases, pricing across global and US markets remains near historic highs, supported by stable contract terms and conditions.

Euler ILS Partners noted that the renewal season progressed without significant disruptions, with ample capacity available to meet market demand. While risk-adjusted pricing declined slightly in some segments, overall contract terms remained unchanged.

Retentions generally remained at 2024 levels, though some US loss-affected contracts saw increases. In the retrocession market, demand remained strong for expanded coverage, particularly for secondary perils such as wildfires and floods.

Meanwhile, traditional reinsurance coverage largely maintained its existing structure in terms of included perils and geographic scope.

Rates declined moderately across all regions for placements without recent loss activity, according to Euler ILS Partners. Reductions varied by coverage layer, with higher-risk layers experiencing smaller decreases than lower-risk layers.

The firm observed that, while pricing adjustments reflected improved market capacity, rates remained elevated compared to historical averages.

For US transactions impacted by Hurricane Helene, Hurricane Milton, and severe convective storms, rates increased by 30-45% compared to 2024. In Europe and Asia-Pacific, loss-affected contracts saw more modest price increases ranging from 10-15%.

Italian reinsurance deals experienced pricing adjustments of around 15%, which was lower than expected despite significant hail losses in 2023 and further deterioration of those losses in 2024, Euler ILS Partners reported.

Several factors are expected to influence the upcoming mid-year renewal cycle. Euler ILS Partners highlighted the potential impact of ongoing California wildfires, which could affect US reinsurance pricing if losses exceed US$30 billion. In such a scenario, rate stabilization or even increases could occur for both reinsurance and retrocession coverage.

Japan’s renewal market, following a year of minimal loss activity, is likely to see flat or slightly reduced rates of up to 5%. The UK is expected to align with broader European trends, with anticipated rate decreases of up to 10%, while retention levels and contract terms are projected to remain stable.

Florida’s reinsurance market continues to face challenges due to the frequency of hurricane-related losses. However, Euler ILS Partners expects that significant rate increases passed on to policyholders will help maintain affordability for reinsurers during the mid-year renewals.

Despite variations in pricing trends, the overall market environment remains conducive to generating strong risk-adjusted returns, according to Euler ILS Partners. The firm emphasized a continued focus on underwriting discipline, diversification across regions and risk classes, and leveraging expertise and market relationships to navigate evolving conditions in the traditional reinsurance sector.

What are your thoughts on this story? Please feel free to share your comments below.

Keep up with the latest news and events

Join our mailing list, it’s free!