Aon’s latest Reinsurance Market Dynamics report reveals a competitive and buyer-friendly reinsurance market at the April 1 renewals.
The report notes such market conditions could particularly benefit insurers across the Asia Pacific region, including Japan, South Korea, and India. It outlines how strong reinsurer results, relatively mild natural catastrophe activity, and ample capacity have created favorable conditions for insurers, with expectations that these trends will continue through the mid-year renewals.
According to Aon, global reinsurer capital reached a record US$715 billion in 2024, fueled by robust retained earnings and a growing catastrophe bond market. The outstanding limit for catastrophe bonds, for instance, surged to nearly US$50 billion by Q1 2025. These factors have led to increased competition among reinsurers, driving significant reductions in pricing, especially in regions like Japan and South Korea, where property catastrophe rates saw double-digit drops.
“At April 1 our clients continued to benefit from favorable reinsurance market and pricing conditions,” said George Attard, CEO of APAC Reinsurance Solutions at Aon. “We expect to see opportunities for insurers to explore frequency protections and top-up covers as we approach the mid-year renewals, especially for those insurers that concentrate on the key characteristics of high performance.”
The April 1 renewals marked a continuation of favorable conditions from the Jan. 1 renewal period, with reinsurers deploying additional capacity, allowing insurers to secure better pricing. Areas previously considered challenging, such as per-risk covers, saw improvements as insurers leveraged property catastrophe business to drive more holistic support.
The growth in facultative reinsurance also stood out during this renewal cycle, particularly for the Asia-Pacific region. With increasing capacity and more aggressive competition among reinsurers, facultative reinsurance became an even more attractive option for insurers. The report noted that double-digit reductions were observed in competitive segments such as property and financial lines, making facultative reinsurance an effective tool for managing volatility and supporting growth strategies.
Despite these favorable conditions, the mid-year renewals are expected to be the last significant opportunity for reinsurers to meet their 2025 growth targets, as pent-up supply continues to outpace demand. This creates a window for reinsurers to earn premiums and offset any losses from the first quarter.
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