The 1 June 2025 renewal reflects a market transitioning from disruption to disciplined recalibration. Whilst rate moderation continued, underwriting rigour persisted, especially in structurally challenged layers
LONDON: Howden Re expected a continued moderation in property-catastrophe reinsurance pricing at 1 June 2025, with a selective return of capacity following historic pricing strength.
Reinsurers expanded appetite modestly with a focus on core relationships whilst maintaining underwriting discipline in a nuanced pricing environment. Risk-adjusted rate-on-line changes ranged from flat to down 20%, depending on loss experience and attachment point, said a report by Howden Re.
Despite pricing pressures, programmes generally attracted subscriptions above 100%, enabling cedents to negotiate against the stringent terms and conditions that defined mid-year placements in recent years.
The 1 June 2025 renewal reflects a market transitioning from disruption to disciplined recalibration. Whilst rate moderation continued, underwriting rigour persisted, especially in structurally challenged layers.
A stabilising legal and regulatory framework in Florida, combined with increased FHCF retention levels, has helped to support this evolution. The result is a more balanced reinsurance environment characterised by selective engagement, structural discipline and capital re-deployment aligned with long-term returns.
The property-catastrophe XoL reinsurance market continues to recalibrate following several years of dislocation. Capital inflows have rebounded, with newly formed reinsurers and syndicates deploying meaningful capacity into mid-year placements.
As such, expanding supply continues to outpace rising demand, underpinned by improved reinsurer retained earnings and sustained catastrophe bond activity, including the issuance of new and upsized transactions at the upper layers of reinsurance programmes. Consequently, remote-attaching cat-XoL layers have experienced rate reductions in the range of 10% to 20%.
Renewals were marked by early placements and selective structuring across towers. In contrast to last year’s renewal, an active ILS sector has additionally offset reduced allocations from some traditional carriers.
‘The dynamic this year was neither a continuation of 2023’s dislocation nor a broad softening. Rate levels remain historically high but are now outpacing loss trends in many areas’, said Kyle Menendez, Managing Director, Howden Re, North America.
‘This is drawing more interest from markets, including Lloyd’s syndicates with previously cautious balance sheets looking to grow incrementally,’ he said.
Layered outcomes
Outcomes were mixed across towers. Top layers experienced the most competitive pricing, with some rate reductions greater than average as a result of surplus ILS capacity. This mirrored trends seen earlier this year in other peak zones.
One distinct feature of this renewal was the strategic cohesion observed across programme placements. Cedents purchasing multiple layers or products on a concurrent basis found greater support from reinsurers willing to underwrite holistically rather than transact tactically.
Brian McKeon, Managing Director, Howden Re, added: ‘Reinsurers are being deliberate. We’re seeing evidence of measured growth, especially from those carriers that had stepped back in recent years. More reinsurers support full programme structures, especially where multiple property products are purchased at the same inception date, in the hope of influencing catastrophe occurrence signings.’
Reinsurer support extended to property per-risk XoL placements, alongside a resurgence in aggregate or second and third event covers. In addition to traditional occurrence protection, cedents are evaluating, and increasingly attracting, capacity for sideways and aggregate structures, as reinsurers respond to heightened cedent demand for coverage that addresses the frequency of catastrophe events.