Insured catastrophe losses are estimated to be $121 billion in 2025, 18% below the five-year inflation-adjusted average, due to a benign US wind season, the broker said.
Carpenter noted that “reinsurers continue to benefit from high attachment points, demonstrated by reinsurers’ lower share of catastrophe loss. This factor, along with abundant capacity, are driving competitive pricing conditions, with catastrophe rate-on-line (ROL) down double digits globally.”
Excess capital positions, profitable underwriting results, and property reinsurance rates all drove reinsurers’ appetite for growth, Carpenter continued.
For property catastrophe placements, cedents were able to achieve double-digit risk-adjusted rate reductions for non-loss affected programs. In addition, reinsurance buyers sought better risk sharing, such as aggregate and catastrophe quota shares.
Property catastrophe demand increased 5-10%, depending on the region and segment of the market, the report said, explaining that half of increased demand was for traditional capacity, while the other half of additional demand was for aggregate products, catastrophe quota shares or alternative solutions, such as catastrophe bonds or parametric products.
“With excess property capacity, cedents were in a position of leverage and pursued renewal terms aggressively,” Carpenter said. “With the ability to choose reinsurance partners, we observed a wider range of utilization of reinsurers’ offered lines.”
Cat Bonds Hit All-Time Highs
Strong investor appetite for insurance-linked securities (ILS) also has contributed to softer property market conditions.
Carpenter said the total outstanding notional amount of property and cyber catastrophe bonds has now reached an all-time high of more than US$58 billion, which includes 15 first-time sponsors in 2025.
“Driving issuance activity in 2025, sponsors have been attracted to the bond market for many reasons, including favorable pricing, broadening terms and conditions (e.g., expanded perils, aggregates, second event covers) and excess capacity,” the report explained. “Investors have also been attracted to the bond market, given the relative spreads compared to other asset classes, liquidity in the market and limited loss activity.”