Improved pricing, greater competition, and a notable increase in capacity helped drive stronger retrocession and aggregate cover placements at the 2025 mid-year reinsurance renewals, according to broker Aon.
Moreover, buyer behaviour was focused on hedging efficiency, with price and layer level as primary drivers, while coverage quality and counterparty selection remained key considerations too.
“The absence of any major attaching or collateral trapping loss to the retro market, including minimal impact from Helene and Milton and the California Wildfires, has supported strong profitability across the segment,” Aon explained.
“Price improvements and competition were most dramatic in the tail where products overlapped with the catastrophe bond market.”
The property catastrophe reinsurance market also benefited from increased supply, enabling more flexible terms and heightened pricing competition across most geographies.
Importantly, the broker also notes a shift in reinsurer appetite, with more willingness to offer protection lower down in programs and to revisit products that had previously been difficult to secure, notably aggregate covers.
In the United States, reinsurers were more amenable to providing aggregate and subsequent event coverage, particularly for cedents with loss-free and well-performing portfolios. These insurers also had the opportunity to recalibrate retention levels and attachment points in light of favorable market conditions.
“The scope of available coverage and program options varied but were more widely available and appropriately priced than previous renewals,” Aon added.
Moreover, U.S. regional carriers renewing at June 1 and July 1 largely benefitted from modest price reductions, with better-performing risks achieving reductions aligned with overall U.S. market trends.
“Although outcomes varied by region and loss experience, most placements experienced modest price reductions, with good performing risks achieving rate reductions in line with or close to the overall U.S. market,” Aon said.
Adding: “As market conditions have improved, U.S. regional insurers are demonstrating growing interest in expanded protection, supplementing core reinsurance coverage with aggregate and second or third event covers, where pricing and terms allow.”
The broader backdrop features a surge in ILS capital, which has now surpassed $115 billion, paired with rising institutional interest in structures like casualty-focused sidecars and tail-risk retrocession, reinforcing the market’s capacity to support aggregate and retro solutions.
Read all of our reinsurance renewal news coverage.
