Reinsurance market primed for 'more competitive' 2025

Insurers have experienced positive mid-year renewal outcomes, Aon reports.

Renewal totals for the America’s, Australia, and New Zealand are ‘significant’ ahead of hurricane season. (Credit: Mike Mareen/Adobe Stock)

Positive mid-year renewals for insurers have set the stage for a more competitive reinsurance market in 2025, according to a recent report from Aon.

Focusing on results in the Americas, Australia, and New Zealand, Aon’s reinsurance market study showed renewals for were significant at the start of the 2024 Atlantic hurricane season.

When compared to 2023, mid-year capacity for U.S. businesses added $10 billion of catastrophe limit.

Aon said that insurers achieved positive outcomes at mid-year renewals, with property catastrophe risk-adjusted rate reductions and improvements in terms and coverage.

“Overall, U.S. insurers experienced risk-adjusted price reductions ranging from mid-single digits to low-double digits,” the report continued. “Renewals in Latin America and the Caribbean were also broadly positive.”

Meanwhile, insurers in Australia and New Zealand experienced stable mid-year market conditions.

Total reinsurance industry capital reached a record $695 billion in the first quarter of 2024, according to the report, driven by retained earnings, recovering asset values and new inflows to the catastrophe bond market. The first quarter tally exceeded previous highs from 2021, Aon said.

Also during the first quarter of 2024, Aon estimated that shareholders’ equity reported by global reinsurers went up $23 billion to a new high of $585 billion. Aon attributed the milestone to robust underwriting and improved total investment yields, which combined to deliver very strong returns on equity.

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