Notably, the catastrophe bond market reported a record issuance of more than $16.8 billion dollars in the first half of this year. (Credit: Shutterstock)
Despite natural catastrophe losses in the first half of 2025, midyear reinsurance renewals still saw a “broadly competitive environment,” according to Aon plc’s Reinsurance Market Dynamics Midyear 2025 Renewal report.
Aon credits this reinsurance environment to insurance-linked securities markets and new entrants to the market that were willing to deploy capacity and grow their market share. Industry capital increased to $720 billion at the end of Q1 2025 from $715 billion in the 2024 fiscal year. Two-thirds of the reinsurers tracked for the report saw a double-digit return on equity in Q1 2025.
Notably, the catastrophe bond market reported a record issuance of more than $16.8 billion in the first half of this year. This included the two largest transactions in the history of the market with each surpassing $1.5 billion.
“The current reinsurance market conditions create opportunities for insurers to address specific issues, or to adjust program structures and coverage to reduce volatility in both property and casualty,” Steve Hofmann, U.S. CEO of reinsurance solutions at Aon, said in a release. “This against a backdrop of forging the long-term partnerships that are necessary to drive innovation, new solutions and sustain a stable and robust re/insurance sector.”
Aon reports that overall, most of the major reinsurers are on track to deliver good results in 2025. Strong capital positions continue to translate into healthy risk appetites, especially in property and most specialty classes, which they expect will continue into future renewals. Property lines, in particular, have benefited from increased supply, which has led to more flexible terms and conditions as well as a wider product range and greater pricing competition.
In the casualty market, mid-year renewals remained broadly stable, but renewal outcomes varied depending on the line of business, loss experience and individual insurer performance. Aon reports that casualty capacity was adequate to meet demand, but reinsurer appetites are varied and underwriters continue to differentiate. They advise that insurers in this market will need to “demonstrate price adequacy, diligent underwriting and exposure management, as well as close cooperation between claims and underwriting.”
Throughout the rest of 2025, Aon expects reinsurers in the casualty market will remain watchful of developments in nuclear verdicts, adverse development and emerging risks.
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