Property and casualty rates are moderating after years of hardening conditions, according to Gallagher Re’s latest “1st View: Finding the Path” report released for April 2025 renewals.
The April 1 renewal period reveals a reinsurance market gradually finding equilibrium, with property catastrophe pricing trends indicating a slowdown in rate increases compared to previous cycles. The report highlights this as a significant shift from the volatile market conditions that have characterized the insurance landscape since 2022.
Alternative capital is playing an increasingly important role in stabilizing the market. The report highlights growth in non-life catastrophe bond capacity, with both issued and outstanding bonds showing positive trends. The weighted average discount margin and expected loss figures suggest a more balanced risk-reward ratio for investors in insurance-linked securities.
Casualty lines present a more nuanced picture, with rate movements varying across different segments. Some casualty sectors continue to face upward pressure while others have reached rate adequacy, reflecting different responses to claims inflation and evolving risk profiles.
Specialty sectors including marine, aviation, and specialty property demonstrate selective rate movements based on loss experience and available capacity. These sectors exhibit continuous adaptation to changing global risk landscapes.
The year-end non-life ILS assets under management data indicates sustained investor interest in alternative risk transfer mechanisms, which helps moderate traditional reinsurance pricing through increased competition.
“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.
“Assuming no major unexpected events during the remainder of 2025 it is likely that the differentiated approach to risk adjusted rate reductions being taken by the global reinsurance market will not only continue but accelerate.”
Gallagher Re also highlights the challenge reinsurers face in balancing the desire to deploy increasing capital levels in an attractive market with the pressure to support less differentiated, blanket rate reductions.
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