Cedants gain ground in competitive 7/1 renewals, says Gallagher Re

Reinsurance buyers secured more favourable terms at the 1 July renewals as competition among reinsurers increased and capacity remained ample across most lines, according to Gallagher Re.

In its latest 1st View report, the reinsurance broker said property treaty rates saw risk-adjusted reductions, while casualty pricing was largely flat.

These outcomes were achieved despite a first quarter marked by elevated catastrophe losses, the broker observed.

Tom Wakefield, global chief executive at Gallagher Re, said: “Buyers generally experienced a more competitive reinsurance market at the July 1 renewal compared to recent years, with capacity available, even where demand increased, and reinsurers looking to grow.

“With these conditions in place, clients had the opportunity to challenge the status quo, and secure improvements to the structure and terms of their property and specialty reinsurance programs.”

Gallagher Re said reinsurers entered the mid-year renewals in robust financial health, with increased capital driven mainly by retained earnings.

The firm’s April Reinsurance Market Report had already flagged that capital dedicated to reinsurance hit a record $769bn by the end of 2024.

So far in 2025, reinsurers appear on course to deliver returns on equity in the mid-teens, with traditional capital expected to rise by a further six percent through the year, assuming average loss activity.

Casualty picture mixed

In casualty lines, renewal outcomes varied significantly depending on cedant performance. Those insurers able to demonstrate strong underwriting and effective claims management secured more favourable deals. Others, particularly those with unresolved loss issues, faced a tougher renewal environment, the broker noted.

For cyber and other specialty lines, Gallagher Re reported a continuation of trends seen at the January renewals. This included improved risk-adjusted pricing for reinsurance buyers and retro purchasers.

Despite the global property cat loss tally being relatively high in the first quarter, Gallagher Re said the impact on renewals was largely contained. Loss-hit portfolios were the exception, but broader market sentiment remained stable.

The report also highlighted continued growth in alternative capital.

The insurance-linked securities market saw $4bn of new non-life inflows in Q1 alone, contributing to $15.2bn of catastrophe bond issuance in the first half of 2025 — a 36% year-on-year increase.

In overall terms, Gallagher Re described a reinsurance market at the year’s halfway point that has tilted back toward buyers in pricing terms, albeit with reinsurers still showing discipline in underwriting.

“Reinsurers are increasingly looking to deploy their significant capital,” the report said, “but they remain disciplined in their approach.”