Aon Report Details Buyer-Friendly Conditions at April 2025 Reinsurance Renewals

According to Aon's Reinsurance Market Dynamics—April 2025 report, reinsurers entered the April 1 renewal period with strong capacity, favorable pricing trends, and a competitive appetite for risk—particularly benefiting insurers in the Asia–Pacific region, including Japan, South Korea, and India. These renewals saw continued buyer leverage as reinsurers deployed additional capital amid improved underwriting results and lower natural catastrophe losses.

Per the report, the favorable conditions evident in the January 1 renewals extended into April, resulting in broad-based pricing reductions. In Japan and South Korea, risk-adjusted property catastrophe rates experienced double-digit declines, driven by reinsurer competition and a lack of significant recent catastrophe events. These reductions were especially notable in core catastrophe programs, where increased reinsurer appetite allowed buyers to secure improved terms and structure flexibility.

Aon said that coverage areas previously under pressure, such as per-risk programs, also benefited from the broader market dynamic. Reinsurers' growth ambitions, combined with insurers' ability to bundle attractive catastrophe risks, contributed to more holistic support across lines. As a result, insurers were able to optimize their reinsurance programs beyond traditional catastrophe layers, achieving pricing relief in more granular risk segments.

According to Aon, global reinsurer capital rose to a record $715 billion in 2024. This increase was driven by strong retained earnings across the sector and significant growth in the insurance-linked securities market. Notably, the catastrophe bond segment expanded considerably, with outstanding limit nearing $50 billion as of Q1 2025. The report highlighted that this influx of capital has improved overall market liquidity and allowed for greater deployment flexibility heading into midyear renewals.

Per Aon, facultative reinsurance also played a prominent role in the April 1 renewal season, especially in the Asia–Pacific region. Facultative capacity expanded significantly, and reinsurers competed aggressively to secure placements. This dynamic created a buyers' market in competitive lines such as property and financial, where double-digit rate reductions were observed. Facultative reinsurance, the report noted, is becoming an increasingly effective tool for insurers in the region to support growth initiatives and manage volatility.

According to Aon, the market remains well capitalized heading into the midyear renewals, with reinsurers continuing to seek opportunities to deploy capacity. Demand for more than $7.5 billion in additional US property catastrophe limit is expected in the midyear cycle, which will serve as the final major opportunity for reinsurers to meet 2025 growth and premium income targets. Aon said the balance of supply and demand continues to favor buyers, with reinsurers focused on maintaining relationships and competing for profitable business.

Looking ahead, Aon expects insurers to explore additional options such as frequency protections and top-up layers. These structures are expected to gain traction in the current environment, supported by reinsurers' willingness to innovate and accommodate insurer demand for tailored solutions. According to the report, facultative reinsurance will remain a key strategy in this context, enabling insurers to adapt to market developments and support longer-term business objectives.