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While the April 1st reinsurance renewal is a smaller affair for property catastrophe accounts in the United States, broker Gallagher Re reports a wide-range of pricing outcomes, dependent on loss experience, with risk-adjusted rates on-line falling as much as 15% for loss free accounts, or rising as much as 15% for catastrophe loss hit.

“In a relatively light renewal period, nationwide account dynamics were broadly a continuation of the themes witnessed at the 1.1.2025 renewals,” Gallagher Re explained.

Adding that, “Reinsurers were highly focused on the impact of the January Californian wildfires, with buyers focused on differentiating both approach to the peril / geography and the outcomes from the event(s).”

However, impacted renewals were small in number and outcomes at the April reinsurance renewal for US cedants were highly dependent on loss experience and also program size.

Catastrophe loss free accounts property catastrophe reinsurance rates on-line came in with -5% to -15% reductions, on a risk-adjusted basis, Gallagher Re reports.

But, catastrophe loss hit US accounts saw property cat rates ranging from flat to +15%.

Risk loss free property reinsurance treaties renewed from flat to -5%, while risk loss hit property renewals saw rates-on-line ranging from +5% to as much as +20%, Gallagher Re said.

Which drives home the wide-range of outcomes and the influence of losses on property and property catastrophe reinsurance appetites and pricing at this time.

Despite the wildfires in January, Gallagher Re noted that capacity for US property catastrophe risks remained ample at the April 1st 2025 renewals.

Buyers took advantage of the increased capital supply to hold their retention levels constant, and push price reductions at the top end of their towers, typically the most competitive layers.

Due to increased capacity for property risks, Gallagher Re said there was increased demand for aggregate covers at the renewals with more placements seen as well.

“Several carriers sought to bolster existing aggregate programs, while others looked to establish new programs. That said, these aggregate protections continued to be pitched at the capital preservation, not earnings protection level,” Gallagher Re explained.

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US property cat renewals see wide range of pricing outcomes at April 1st: Gallagher Re was published by: www.Artemis.bm
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Howden Re has reported that risk-adjusted catastrophe excess-of-loss (XoL) reinsurance rates-on-line for Japan saw reductions of 10-15% at the April 1st 2025 reinsurance renewals, as pricing “eased from a high base” and sellers sought to protect or grow positions at the renewal amidst higher competition and greater supply.

Risk-adjusted rate reductions in Asia-Pacific (APAC), combined with varied specialty renewal outcomes, reflects “hard market softening” at the Japan-focused April renewals, according to the reinsurance broker’s latest analysis.

With many property catastrophe reinsurance treaties having experienced relatively loss free outcomes for the last contract year, a continuation of January’s softening trend had been largely anticipated for the April renewals, as we reported.

“There were 10-15% risk-adjusted reductions on catastrophe excess-of-loss programmes, whilst global specialty and direct and facultative reinsurance placements varied by class,” the broker added.

The broker also revealed that both Japanese wind and earthquake XoL pricing adjusted from a high base at the April renewals, following consecutive years of market-driven and post-loss hardening, which began in 2018 and 2019 following the impacts of typhoons Jebi, Hagibis, Trami, and Faxai.

You can see Howden Re’s updated rate-on-line index chart for Japanese catastrophe excess-of-loss reinsurance contracts below:

“The natural catastrophe loss landscape in Japan and the Asia-Pacific region in 2024 was subdued relative to previous years, contributing to moderation at renewals,” Howden Re explained.

“The most significant losses of the last 18 months have been the Noto earthquake in January 2024, the Taiwan Hualien earthquake in April and Typhoon Yagi in September.”

Additionally, there had been some debate across the industry surrounding the potential impact of the January 2025 California wildfires on the Japanese April 1 renewals, however, Howden Re notes that the event, while impactful to reinsurer operating performance, did not “meaningfully constrain supply at 1 April.”

Overall, for Japanese catastrophe XoL programmes, less limit was purchased at the lower end of programmes with some buyers of coverage seeking additional top-layer reinsurance limit to address specific risk concerns, Howden Re continued.

The broker also noted, on average, ceding commissions for proportional quake cover increased by approximately two percentage points, signalling improved terms for cedants, as per-risk commissions varied by programme performance.

However, despite rate reductions of up to 15%, Howden Re says that “Japan remains an attractive market for reinsurers due to its high volume, relatively uncorrelated risk and deep pool of underwriting expertise backed by experience and exposure data.”

Andy Souter, Head of Asia Pacific, Howden Re International, commented: “This renewal is, on balance, a welcome reprieve for buyers in Japan and throughout Asia-Pacific on the back of an extended period of significant rate increases. With the recent easing in pricing and stable renewals, it’s a good time for cedents to secure more favourable terms and address specific risk concerns.”

Further in Howden Re’s analysis, the broker highlighted how the price moderation witnessed in most classes of business at the April renewals was facilitated by rising levels of dedicated reinsurance capital and strong insurance-linked securities (ILS) inflows, while also noting that capital levels now exceed their previous peak.

“This increase has been bolstered by record catastrophe bond issuance, which has continued in earnest during the first quarter of this year. Whilst reinsurers have reported healthy earnings and strong book value growth, it is becoming clear that future gains will increasingly depend on strategic innovation, rather than pricing momentum alone,” the broker added.

You can see Howden Re’s estimates for reinsurance and ILS sector capital levels in the chart below, which shows the significant growth seen in recent years:

David Flandro, Head of Industry Analysis and Strategic Advisory, Howden Re, commented: “At this stage of the pricing cycle, profitable growth increasingly requires a greater focus on product development, underwriting strategies and capital management.

“In order to navigate this market phase, comprehensive, integrated capabilities spanning treaty, facultative, MGAs, strategic advisory and capital markets, Howden Re is uniquely positioned to support cedents and reinsurers as they navigate this next critical phase of the cycle.”

Howden Re’s April renewal report also revealed mixed outcomes at April 1st for the global specialty reinsurance sector, primarily driven by ongoing uncertainty around war-related losses and macro volatility.

The broker explained that aviation reinsurance risk-adjusted pricing was largely flat at April 1st, showing a slight hardening compared to the 3.5% year-on-year decline seen at the January renewals earlier this year.

Moving over to the marine and energy space, Howden Re states that the downstream losses experienced in 2024 had little impact on programmes at April 1st, although the Baltimore bridge collapse remained in focus, due to the incident taking place within days of last year’s renewal and was therefore largely unaccounted for.

Although wildfire exposures were widely discussed, Howden Re noted that within the marine and energy space, specie was the main focus.

Switching attention over to terror, reinsurance rates reduced further amid softening on the direct side of the market.

“Consistent event definitions continued to provide stability in an otherwise evolving market. New capacity is simultaneously seeking entry through the MGA channel on both the insurance and reinsurance side, as observed in previous renewal cycles,” Howden Re explained.

On the other hand, the direct & facultative (D&F) market “continues to show resilience with strong demand for excess-of-loss capacity despite early 2025 loss activity,” says Howden Re.

The broker explained that reinsurers demonstrated greater pricing discipline at April 1st, compared to January 1st, particularly in response to California wildfire exposures which were largely retained by cedents.

Chris Medlock, Director, Global Specialty Treaty, said: “The April renewal reflected a broad range of outcomes across specialty and D&F lines. Whilst pricing softened in some areas, reinsurers remained selective and disciplined. Capacity was available but placement success depended on structure, exposure and underlying risk quality.”

Read all of our reinsurance renewals news and analysis.

Japanese property cat rates down by as much as 15% at April 1: Howden Re was published by: www.Artemis.bm
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The April 1st 2025 reinsurance renewals are said to have seen a continuation of the gradual softening trend experienced at the start of the year, with reinsurance capital providers displaying strong appetites for growth still, but sources suggesting the overall outcome has remained disciplined.

While there have been some double-digit rate decreases seen, particularly in Japan and for higher-layers of towers, the general feeling is one of markets remaining focused on achieving adequate risk-adjusted returns for deploying capital to April renewal opportunities, as pricing comes off cyclical highs.

With many property catastrophe reinsurance treaties having experienced relatively loss free outcomes for the last contract year, a continuation of January’s softening trend had been largely anticipated.

Speaking with brokers and market participants in the last week, the outcome looks set to be one where many treaties have priced down, on a risk-adjusted basis, but that some larger cedants buying bigger reinsurance towers have also been taking the opportunity to leverage their financial strength to manage renewal costs, particularly in Japan.

Sources in the collateralized market and at insurance-linked securities (ILS) funds told us that they have been satisfied with the  April 1st opportunities they have sourced, while also noting a more competitive marketplace and strong appetites from reinsurers that have in some cases made ILS funds be more selective.

As well as reinsurers exhibiting strong appetites for growth at this renewals, which is no surprise given high capital levels and the fact pricing remains robust even with the softening seen, there are also said to have been some additional renewal participants, with some markets returning with a desire to grow into regions that were renewing at April 1.

One of the drivers for that is an impression that some regions renewing at April 1st have experienced strong growth in premium volumes, expanding the available opportunity set. But overall demand for protection across the April renewal has been relatively stable it seems, with additional purchases at some levels in reinsurance towers offset by stronger or larger cedants managing their costs through increased retentions and restructuring of towers.

On a risk-adjusted basis many renewals have come in softer it appears, but this is still only seen as a gradual continuation of recent renewal trends, despite the more competitive marketplace and in some cases growing number of reinsurance panel participants.

Brokers told us that there has been ample capacity to close renewals for April 1st and that their clients, the reinsurance buyers, are largely very satisfied with the favourable outcome.

The broader range of market participants being seen has also included some ILS players who, we’re told, have had some additional capacity to deploy and found opportunities attractive enough to meet their return targets.

Fully-collateralized limit remains less evident at April 1st, compared to other major renewals, given buyers often have a preference for rated paper. There is collateralized ILS deployment into April renewals, but it’s often based on long-term relationships with ILS managers and has never expanded that rapidly.

But, we understand fronted ILS capacity continues to be a participant that is growing in some cases, with some ILS managers said to have have accessed business from new regions and counterparties this year.

Japanese renewals have seen a competitive market environment this year, with softening largely seen, especially for the clients that have been able to demonstrate the best performance, most disciplined growth and where enhanced data granularity has been provided.

As a result, renewals are seen as risk-adjusted down by single digits and close to double-digits, for the majority, or into double-digits for top-performing cedants and larger catastrophe excess-of-loss towers, especially at higher-layers.

Reflecting the discipline still being seen, we’re told that the performance of an underlying treaty has been a key in April renewal outcomes, with markets pushing back on much lower rates in some areas, while reductions have been highest for cedants that can demonstrate their performance and provide enhanced portfolio data to assist reinsurance markets in their pricing.

But, perhaps making the outcome a little less clear, Japan renewals saw some larger buyers opting to manage the costs of their reinsurance purchases by retaining more risk against their backdrop of strong results and robust financials. Some have also been keen to buy more cover higher-up as a result of this trend, we are told.

Another major April 1 renewal market is India, where there were flatter risk-adjusted outcomes for many, but some softening seen, again for the best performing cedants. Here there has also been some demand increase it appears, although this is on the back of strong premium volume growth, we understand.

The Philippine market is thought to have also experienced a softening market for reinsurance at the renewals, although with some greater differentiation seen. Other parts of Asia are said to have experienced similar outcomes.

On the all-important terms and conditions, sources said the majority remain relatively unchanged, aside from adjustments where retentions have been adjusted to account for growth, or financial strength, often at the behest of the cedant itself, another sign of cost management in a still harder reinsurance market price environment.

Rates-on-line remain higher than where they were five years ago, even with the continuation of the January softening trend at April 1st, but we understand markets did push-back on early attempts to push for greater reductions this year, seemingly keen not to see the rate environment return to the levels seen around 2017.

Property catastrophe reinsurance rates-on-line had fallen by 7.2% at January 1st, according to broker Guy Carpenter’s regional indices.

Guy Carpenter’s APAC property catastrophe reinsurance rate-on-line Index was still up by 32% after the January renewals, since the market bottomed out in 2018 for this region.

When this index is updated to incorporate the April 1st outcomes, it seems likely the 2025 figure will fall a little further given the sentiment we’re hearing from the market.

There are some reinsurance renewals in the United States at April 1st and here we’re told that again, the outcome is seen as similar to January, however with more differentiation evident dependent on loss experience and with the recent California wildfires being factored in.

We understand there has been some demand increase in the US, while there has also been a little more retrocession buying and that this has experienced competitive markets as well.

In the coming days we expect to get more colour as broker reports on the April renewals come out, so stay tuned for additional insights.

Read all of our reinsurance renewals news and analysis.

April reinsurance renewal sees softening trend continue, but discipline maintained was published by: www.Artemis.bm
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Equity analysts from investment bank J.P. Morgan came away from a recent visit to companies in the London insurance and reinsurance market with the impression that underwriters feel there is plenty of headroom left in the higher attachment points still installed across the sector, despite inflationary influences on losses.

“We came away from the tour with the feeling that the market is still in a good place; rates might be starting to weaken but they remain at highly adequate levels with the potential for strong ROEs for at least the next couple of years,” the analysts said.

While pricing trends are slowing across reinsurance, the J.P. Morgan analyst team note that they remain at “very healthy levels”, saying that while reinsurance softened through 2024 “the picture remains positive overall.”

“While there was a softening in price, it was considered that terms and conditions remained robust and attachment points were still at attractive levels,” the analysts reported.

Saying, “We had been slightly concerned about whether the material improvement in attachment points had been eaten away by inflation but we came away reassured that there is still plenty of headroom before the increase in retentions disappears.”

As a result, the London market insurance and reinsurance constituents that J.P. Morgan’s analyst team met with are largely confident that attractive underwriting opportunities exist.

“The view was almost universal that given the rate adequacy of pricing, there were likely to still be opportunities to grow and expand portfolios in 2025,” the analyst team explained.

The analysts highlighted in their report, that some attachment points do get adjusted for inflation, which tends to result in further upwards movement given the general inflationary trajectory seen around the world.

This resulted in attachments being “broadly flat in nominal terms” at the 1/1 reinsurance renewals and the majority are still at healthy levels, despite any inflationary influences.

The outlook for April 1st reinsurance renewals in Japan and South Korea had always been for a continuation of January’s softening trend.

It seems that in some cases the Japanese rate softening has been perhaps slightly faster than January, with some layers of towers seeing rate decreases in the double-digits, but overall we’re told the perception is that attachments have largely held again and some have been adjusted for inflation.

J.P. Morgan’s analysts said that the sentiment in London during their recent visit was that the recent wildfires might dampen price softening at the US renewals at the mid-year.

As rate-on-line stagnates, or softens, it’s going to be incredibly important for underwriters to take into account the effects of inflation on exposure and therefore ensure attachments are being kept at sufficient levels.

It would be very easy to allow for the effective attachment points to come down, as a lever for sustaining more rate per unit of risk in property catastrophe reinsurance renewals.

But the market has been there before, in the last softening cycle through the early to mid 2010’s, when there was little control of attachments and terms or conditions that in some cases caused meaningful increases in the probability that reinsurance layers attached.

While there may be plenty of headroom in attachment points at this stage and the market has appeared disciplined on this front, it’s important that other terms and conditions are not weakened to the degree that attachment risk rises unduly, while underwriters and insurance-linked securities (ILS) managers also need to keep a grip on inflation.

So many factors go into deriving a probability of attachment, for a reinsurance layer or an instrument such as a catastrophe bond. Inflation can undermine attachments if it’s not properly measured, considered and factored in.

But it’s also key to capture all forms of inflation, through the exposure base but also in the economy and how each can affect claims quantum, development and follow-on costs that can drive claims higher such as rebuilding.

While headroom still exists at this time, there’s no guarantee it will remain in a year or two’s time if the market becomes increasingly aggressive and competitive at renewals, or falls back into its old habit of placing the importance of securing volumes higher than sustaining profitability.

Plenty of headroom left in higher reinsurance attachments, despite inflation: J.P. Morgan was published by: www.Artemis.bm
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Insured losses from the Los Angeles wildfires, which are currently estimated between $35-$50 billion, could support property catastrophe pricing heading into the mid-year reinsurance renewals, according to Goldman Sachs, however, analysts still expect mid-year rate trends to remain broadly in line with the January 2025 renewals.

Analysts highlight that the big four reinsurers: Munich Re, Swiss Re, Hannover Re, and SCOR, have already absorbed between 24% and 42% of their full-year natural catastrophe budgets due to the first-quarter wildfire losses.

“It remains very early to fully assess the impact on the mid-year renewals, however, the scale of the losses could suggest some upward pressure, although we are still of the view that mid-year renewals will be broadly consistent with what we have seen in January,” Goldman Sachs said.

Despite the severity of the California wildfire losses, Goldman Sachs maintains that the property and casualty (P&C) reinsurance market is in a post-peak margin cycle, following years of rate increases. This was reflected in the January 2025 renewals, where risk-adjusted pricing declined by 0%-2%, across Goldman Sachs’ coverage.

Notably, SCOR’s pricing remained flat, benefiting from lower retrocession costs, while Hannover Re saw a 2.1% decline.

These trends, combined with strong reinsurer returns, increased capital availability, and rising frequency loss activity for primary insurers, contributed to the first overall rate decline in nearly a decade.

While the Los Angeles wildfire losses may help limit further rate declines, Goldman Sachs remains cautious on any significant upward pricing movement at the mid-year renewals.

Analysts suggest that despite the large industry losses, overall reinsurance pricing will likely remain broadly consistent with January trends.

However, this could change if further catastrophe events were to strain budgets and capital availability across the market in the coming months.

As the mid-year renewals approach, market participants will closely monitor how capital levels and loss experience evolve, particularly given the uncertainty surrounding wildfire-related claims and broader catastrophe activity in the months ahead.

LA wildfires may support mid-year rate expectations for property cat: Goldman Sachs was published by: www.Artemis.bm
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