Fitch survey: Reinsurance market faces mixed pricing expectations for 2025

Reinsurance market participants have mixed pricing expectations for 2025, according to a Fitch Ratings survey conducted during the Rendez-Vous de Septembre in Monte Carlo.

Just over half of the 81 respondents – including reinsurers, insurers and brokers – expect global reinsurers to raise prices in January 2025, with 30 percent predicting increases over 5 percent.

However, 22 percent of respondents foresee lower rates, while Fitch itself expects a softer market in 2025 due to abundant capital. The rating agency has downgraded its reinsurance outlook from “improving” to “neutral”.

Opinions were split on which business line would offer the best margins in January, but casualty was the least popular answer, selected by only 16 percent of respondents. Fitch said this reflects challenges in coping with rising loss costs from social inflation.

Fitch expects reinsurers to push for double-digit increases in US casualty premiums while reducing cover limits and quota share commissions.

There was no clear consensus on whether pricing will adequately address rising property catastrophe loss trends, though Fitch believes reinsurers are well-positioned to maintain profitability and expects underlying margins to remain close to their 2023-24 peak in 2025.

Strong capital buffers, disciplined underwriting and stringent terms are expected to help reinsurers manage growing climate-related risks, according to Fitch.