Reinsurance Market Turns Favorable for Buyers as Capital Surges in Midyear 2025 Renewals

The U.S. reinsurance market shifted dramatically in favor of buyers at the midyear 2025 renewals, as robust capital inflows and solid insurer performance led to improved pricing and coverage terms. According to Aon’s midyear market update, the June and July 1 renewals marked a pivotal turning point, with reinsurers competing aggressively to deploy record capital levels—reaching $720 billion globally—despite $60 billion in first-quarter losses, primarily from California wildfires.

A 10% increase in global property catastrophe demand was spurred in part by Florida’s Citizens Property Insurance depopulation initiative, which shifted hundreds of thousands of policies to private carriers. At the same time, catastrophe bond markets set new records with $16.8 billion in issuance, reinforcing overall market capacity and competitiveness. Buyers with strong loss records saw notable benefits, with loss-free placements achieving double-digit rate reductions.

However, reinsurers are applying more nuanced performance-based pricing. While property facultative reinsurance became more accessible and cost-effective, casualty facultative markets tightened due to mounting concerns over nuclear verdicts and litigation exposure. Casualty reinsurance for accounts with U.S. exposure saw reduced reinsurer appetite and higher rates, contrasting with improved conditions for international programs.

Aon emphasized that insurers with clear risk strategies, strong analytics, and adaptive underwriting practices are best positioned to thrive. The current favorable market cycle offers a unique window for insurers to optimize program structures and forge lasting partnerships that support long-term growth and innovation.