Howden Re reports continued moderation in P&C 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. 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 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 Howden Re managing director, North America Kyle Menendez. “This is drawing more interest from markets, including Lloyd’s syndicates with previously cautious balance sheets looking to grow incrementally.”
Layered outcomes
Outcomes were mixed across towers. Top layers experienced the most competitive pricing, with some rate reductions greater than average because of surplus ILS capacity. This mirrored trends that were 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.
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.