Property-cat reinsurance rates moderate at June renewals – Howden Re
Rising investor demand and capital inflows reshape structures
Howden Re reported a continued moderation in property-catastrophe reinsurance pricing for the June 1, 2025, renewals.
Capacity selectively returned after a period of strong pricing, with reinsurers modestly expanding their appetite, primarily focusing on core relationships while maintaining underwriting discipline.
Changes in risk-adjusted rate-on-line ranged from flat to a 20% decline, depending on loss experience and attachment points. Despite downward pressure on pricing, most programs attracted subscription levels exceeding 100%, allowing cedents to push back against stringent terms and conditions seen in recent renewal periods.
Dedicated reinsurance capital reached US$463 billion by the end of 2024, reflecting a rebound in asset valuations and a recovery in retained earnings across the sector. The growth was further supported by increased interest from institutional investors, which has helped to sustain capacity levels in the property-catastrophe reinsurance market.
The property-catastrophe excess-of-loss (XoL) reinsurance market continues to adjust following years of market disruption. Capital inflows have increased, with new reinsurers and syndicates deploying significant capacity during the mid-year renewal.
Supply growth has continued to surpass demand, supported by improved reinsurer retained earnings and ongoing catastrophe bond issuance, including both new deals and upsized transactions at higher reinsurance layers. Remote-attaching catastrophe XoL layers experienced rate reductions between 10% and 20%.
Cat bond issuance growth
Catastrophe bond issuance set a record in 2024, reaching US$17.7 billion, reflecting strong investor demand for insurance-linked securities. This surge has been instrumental in boosting available reinsurance capacity, particularly at the upper layers of programs where traditional reinsurers have maintained a more conservative approach.
The increased participation of alternative capital providers has introduced additional competition into the marketplace, contributing to rate adjustments and influencing the structuring of reinsurance programs.