Survey Shows Varied Pricing Expectations for 2025 Reinsurance Market

Reinsurance market participants have mixed views on pricing for 2025, according to a Fitch Ratings survey. The survey revealed that over half of the 81 respondents—reinsurers, insurers, brokers, and other market participants—believe global reinsurers will raise prices at the January 2025 renewals, continuing the upward trend of recent years driven by high claims inflation. Among them, 30 percent expect price increases of more than 5 percent, while 26 percent anticipate more moderate hikes. 

However, only 22 percent of respondents foresee price declines, a view Fitch shares. The agency believes the reinsurance pricing cycle has peaked and predicts a softer market in 2025 due to the sector's ample capital reserves. Fitch recently revised its global reinsurance sector outlook from "improving" to "neutral" to reflect these expectations. 

Opinions were split on which business lines will offer the most attractive margins at the January renewals, though casualty insurance was the least favored, with only 16 percent of respondents selecting it. This may reflect the pressure on reinsurers to manage rising casualty loss costs fueled by social inflation. Fitch expects US casualty premium rates to see double-digit increases as policies are renewed, with reinsurers likely to reduce cover limits and quota-share commissions. 

In the property-catastrophe segment, respondents were divided on whether pricing would offset rising loss trends. Thirty-nine percent thought prices would be sufficient, 36 percent disagreed, and 25 percent were unsure. Despite the uncertainty, Fitch remains optimistic about the sector's profitability. The agency expects reinsurers to maintain strong margins, supported by bolstered capital buffers and reserve adequacy. Fitch also anticipates continued underwriting discipline, especially with reinsurers tightening terms and conditions to mitigate their exposure to secondary peril events amid increasing climate-related volatility.