Reinsurers to maintain healthy pricing and tight T&Cs for another year: Moody’s

According to Moody’s, most respondents to its annual survey of global property & casualty reinsurance buyers expect prices to remain stable or increase in 2025, suggesting that reinsurers will maintain healthy pricing and tight terms and conditions in most business lines for another year.

Around 61% of respondents to Moody’s 2024 survey anticipate stable or rising prices for property reinsurance lines, while 91% have similar expectations for casualty reinsurance.

As per Moody’s, the respondents rank rising loss costs for property and casualty claims as the key factor driving reinsurance price increases in 2025.

“Cedents also consider lower reinsurance capacity as a significant factor influencing rate increases, with geopolitical events and high interest rates playing a smaller role,” the rating agency added.

Despite this, Moody’s observed a “significant shift” in sentiment on property pricing in this year’s survey, with about 39% of ceding insurers expecting some price decreases in their property reinsurance covers compared to none last year.

Still, the survey pointed to healthy demand for reinsurance next year, with 71% of respondents indicating plans to buy the same amount of coverage for portfolio-wide property risks, while 24% plan to buy more coverage.

At the same time, the survey indicated relatively stable demand for casualty reinsurance, with 94% of buyers expecting to buy the same amount of coverage as last year.

As for other key findings from the 2024 survey, 83% of respondents said it is unlikely that attachment points will decrease, while about 52% said they expect higher prices for cyber reinsurance next year.

In light of the many data points mentioned here, Moody’s recently revised its outlook to positive for the global reinsurance industry.

On this, Brandan Holmes, VP-Sr Credit Officer at Moody’s Ratings, said, “With only limited new capital entering the market, this will drive continued strong profitability over the next year, assuming no large catastrophes. We expect property reinsurance pricing to remain favorable.

“Prices for casualty reinsurance have also risen, although reinsurers face rising casualty claims fueled in part by increased litigation in the US. Solid balance sheets will help reinsurers withstand potentially high catastrophe losses and adverse casualty reserve development.”

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