Reinsurers on track for another profitable year: Aon

Reinsurers are expected to report a third consecutive year of significant profit in 2025, leading to further price decreases for cedents, Aon executives said Thursday.

Property reinsurance rates will likely decline, despite significant wildfire-related losses earlier this year, and casualty reinsurance capacity will remain stable during year-end renewals, they said during the brokerage’s renewals briefing ahead of the Monte Carlo reinsurance conference next week.

Annual insured losses averaged about $140 billion from 2017 to 2024 and surpassed $100 billion in the first half of 2025, but the reinsurance sector has remained resilient, said Mike Van Slooten, head of business intelligence for Aon’s reinsurance solutions division.

Combined ratios stayed below 95% in the first half, and high interest rates boosted investment income, resulting in an industry average return on equity of nearly 15% and nearly 20% for the major reinsurers, he said.

“We conclude that most major reinsurers remain on track to produce a third year of strong results, subject to major loss activity in the remainder of the year,” Mr. Van Slooten said.

Even with losses from the California wildfires in January and February, reinsurers’ expected loss ratio for 2025 is between 25% and 30%, said Tracy Hatlested, the reinsurance brokerage’s global property segment leader.

Most reinsurers aim for the mid-40% range, and the industry is well below that level as it enters the peak of the Atlantic hurricane season, she said.

“We believe reinsurers will still be able to achieve target ROEs on their property cat portfolios with rate reductions of 10% or more going into January,” Ms. Hatlested said.

In casualty, primary and excess liability pricing is at an all-time high, said Amanda Lyons, global product leader.

As a result, most reinsurers are maintaining or growing the capacity they offer, she said.

“This would mark the first 1/1 in quite a few years where there’s not a major player announcing a pretty significant pullback,”  Ms. Lyons said.