In his letter to shareholders in RenRe’s 2025 annual report, O’Donnell explained that rate changes in the industry follow a pattern of “punctuated equilibrium,” where rates remain relatively stable for long periods but occasionally shift sharply, often after large catastrophe events.

“So, given the persistent growth in annual catastrophe losses, the more time that has elapsed since the last correction, the lower price adequacy tends to be. In this case, smaller catastrophe losses are more likely to provoke positive price spikes led by reinsurers. However, if the last rate increase occurred recently, prices are likely still adequate and a large loss is needed to move pricing substantially,” he said.

O’Donnell continued, “We saw this first dynamic in 2022 with Hurricane Ian. Property catastrophe prices had been increasing from 2017 but so had loss trends. Losses from Ian pushed those trends to an unsustainable level, prompting a sharp market correction with rate increases of around 50%.”

In the current market, he said rates remain strongly adequate, and pricing would only adjust substantially if a relatively large loss occurred, though this threshold is smaller than what would have been required in 2025.

“This “punctuated” rate behaviour also explains why a subsequent disaster does not necessarily produce another price increase. Hurricanes Helene and Milton occurred soon after significant rate changes in 2023, so no additional pricing improvement was required because margins remained healthy,” O’Donnell stated.

He also noted that viewing property catastrophe through a casualty pricing lens is instructive, as it provides a real-world check and insight into the likelihood of a positive rate move after an event.

“For example, our casualty actuaries monitor actual versus expected loss trend over many years. When assumptions diverge, reserves must be updated, resulting in an adjustment that may cover multiple years – whether positive or negative. We view casualty business over a ten-year cycle and believe that if we underwrite it effectively, it should be accretive over that period.

“Property catastrophe demands a larger risk premium given its volatility, but the principle still applies. When viewed through this lens, we believe that rate has generally remained ahead of trend across property catastrophe business over the last decade. While there are some subjectivities to this conclusion, it is supported by our property catastrophe results, where our calendar year loss ratio has averaged about 50% over this same time period.”

O’Donnell also said he prefers to move away from the traditional hard/soft market terminology and instead thinks a better description of the market is whether or not it is rate adequate, stating that rate adequacy should drive underwriting behaviour.

He highlighted that in a rate adequate reinsurance market, underwriters should be taking more risk, whereas in a rate deficient market, underwriters should be taking less risk.

“A common misconception is that falling rates define a soft market. Property catastrophe reinsurance in 2025 is a good example. Rates were indeed falling, but they remained strongly adequate. Our actions for the year were driven by the level of rate adequacy, which is why we grew our property catastrophe business even though rates were declining. We wrote more risk even at lower rates, because we expect it will be highly accretive to shareholders,” explained O’Donnell.

He noted that for RenRe, rate adequacy is based on the expected profitability of a deal and, more importantly, the return the deal generates against the capital required to support the risk. If the return is above RenRe’s cost of capital, the deal is considered rate adequate.

He continued, “However, just because a deal is rate adequate does not mean we will write it. Our goal is to construct the best possible portfolio. That means comparing each rate adequate deal to our existing portfolio, as well as to other programs or layers that may have a higher return. These comparisons help determine overall line size, as well as adjustments to line size as rates move.

“We repeat this process across all of our vehicles, recalibrating sensitivity and line size decisions multiple times for each program. This enables us to assemble the best aggregate set of risks for our shareholders and our Capital Partners investors.

“When assessing portfolios, many companies focus their efforts on minimising exposure to the part of the loss curve that might result in expected loss to their balance sheet. This approach, however, can result in missed opportunities to maximise profitability in the income statement. We evaluate both the probability of profitability as well as the probability of loss, and we do this on both an underwriting basis and across our Three Drivers of Profit.”

RenRe’s CEO also spoke during the reinsurer’s recent Q4 and full year 2025 earnings call, saying he expects supply demand dynamics in property cat that played out at the January 1st renewals to persist into the mid-year renewals. He believes that the robustness of rate adequacy will produce a similar outcome to what the firm achieved at 1.1.

The post Property cat rates strongly adequate, large loss needed to substantially adjust pricing: RenRe CEO appeared first on ReinsuranceNe.ws.

This morning, Conduit Re announced a strong set of results for 2025, including an 11.1% ROE, which is ahead of market expectations, and which was achieved despite the challenging first half of the year following the costly California wildfires. The reinsurance service result did come down year-on-year but remains solid at almost $110 million, while the investment performance was very strong with a result of nearly $120 million, reflecting a net return of 6.7%.

At the same time, gross premiums written increased by 6.9% year-on-year to $1.243 billion, with strong growth in casualty and modest growth in property, slightly offset by a decrease in specialty.

In its presentation, Conduit Re also provides an overview of its experience at the January 1st, 2026, reinsurance renewals, revealing a risk-adjusted rate change of -5%, with property and specialty down 7%, and casualty off 1%, when compared with the January 2025 renewal.

Conduit Re explained that in property it reduced exposure or exited treaties with poor loss experience or unattractive terms, while in specialty the firm took a hard line on marginal business and exited certain treaties that did not meet its profitability expectations.

In light of this, we asked Eckert how Conduit Re navigates maintaining underwriting discipline while seeking growth in the current market environment.

“The emphasis is not on growth; it’s actually about capital management and portfolio quality,” he said. “So, we don’t feel under any pressure to deliver growth. There’s a good renewal portfolio. We have gone from nought to $1.2 billion from a standing start in five years. The capital is, by and large, pretty well fully deployed. We’ve started doing share buybacks. So, we’ve got an option. It’s not about growing, it’s about capital discipline, and it’s about, if business does not meet our pricing criteria, we will walk away.”

In 2025, Conduit Re grew its casualty portfolio by 23% to $392.3 million, and during the year, rates actually increased after inflation by 1%, but came down 1% after inflation at the 1.1 2026 renewals.

Eckert confirmed that the casualty book is holding up, adding that, “We would expect that effect to continue because of loss activity on some of the back years… So, that’s been underpinning the market, and we don’t see any radical change in those market conditions.”

Looking ahead to subsequent 2026 renewals for property, Eckert said that the expectation is for continued softening.

“That’s a function of capital and results. The rate we published at 1.1 2026 is year-on-year… you’ve then got the US cat renewal season. And we just expect similar trends on an ongoing basis. But at the moment, it’s largely rate adequate,” he said.

While the underwriting result was strong in 2025 in spite of the elevated catastrophe experience in the first half of the year, for Eckert, the highlight of 2025 was the investment return, which was 6.7%, up on the prior year’s 4%.

“Our gross asset base is now up to over $2 billion. So, that’s strong. The balance sheet remains strong, and we continue to buy our shares in the market,” said Eckert.

The post Capital management, portfolio quality prioritised over growth, says Conduit Re CEO appeared first on ReinsuranceNe.ws.

Arch’s reinsurance arm had a strong 2025, contributing more than 50% of the firm’s total underwriting profit in the final quarter of the year.

Speaking recently during the carrier’s fourth quarter 2025 earnings call, CEO Papadopoulo discussed the firm’s experience at the January 1st, reinsurance renewals, and also provided some thoughts on the property and casualty reinsurance markets.

“On January 1, property cat and more generally, short tail excess of loss renewals were highly competitive, with rates down 10 to 20%. Ceding commission increased in proportional reinsurance as supply continued to outpace demand. Despite these headwinds, our underwriting teams performed well by leveraging the strengths of our platform to source a handful of new opportunities. These opportunities will reduce the negative top-line impact from the rate pressure,” said the CEO.

During the Q&A with analysts, Papadopoulo was quizzed on the property cat business Arch wrote at 1.1 and how the softening rate environment impacts the firm’s appetite.

“I think we still like the cat business we wrote at 1.1… We’ve seen Europe being very competitive, I think in the US probably less so compared to Europe. And I think we just adjust our writings to the target profitability that is set by region.

“So, overall, I think we were able to retain most of our renewals. We got some very favorable signing from our broker because of the service we provide and the long-standing relationship we have with many of our ceding companies. We still like the business. I think if rates were to continue to go down in the mid-teens, we will have to, on a case by case basis, realize where it makes sense and where it doesn’t,” he said.

Looking ahead to the mid-year renewals, Papadopoulo noted that the increased competition in the reinsurance market is a reflection of the excellent results companies have benefited from over the last three years.

“The fact that we had only one major cat, which was the California wildfires, absent of any other major cat I would expect the supply to continue to be there. So, I think people should pay attention to the risk-adjusted return going forward, because it will be a big element of how we underwrite the business,” he continued.

Later in the call, the CEO was questioned further on the outlook for the reinsurance business in 2026, if the expected, further downward rate pressure comes to fruition.

“On the reinsurance side, I think margins are definitely under pressure… It comes from the pricing on the excess of loss, and also on the expense side, we’re seeing also ceding commission going up. But we still like the business. We have a big, diversified platform, we write the business in many geographies. So, we believe that we can find ways to continue in an attractive market. But yes, the margins, they were very high, but the margins are definitely under pressure,” he said.

Of course, while property cat often grabs the headlines, Arch also writes casualty reinsurance, and the firm’s CEO offered his views on the casualty sector in 2026.

“So, on the casualty side, generally on the primary before we talk about the reinsurance market, I think on the primary side, we feel that we are still getting more rate than trend. It seems that it’s decelerating a little bit of what we saw in the last quarter. But I personally believe that there’s still pain, I think we still will see some unfavourable developments in the market for the old years and the prior to 2022, so I’m optimistic that the rates could continue to at least meet mid-trend for the foreseeable future.

“When we look specifically at the reinsurance, there’s a lot of supply, a lot of willingness for the reinsurer to write the business. And I think the thing that has been new is, maybe based on what I said earlier, the ability, or the willingness of ceding companies to retain more of the business… The supply is constant and the demand is stable to down. So, that is another layer of competition there,” said Papadopoulo.

The post Reinsurance margins under pressure but we still like the business: Arch CEO appeared first on ReinsuranceNe.ws.

Guy Carpenter, the reinsurance broking division of Marsh, had a strong 2025 with revenues of $2.5 billion, an increase of 6% on the prior year supported by a solid end to the year with Q4 revenues of $215 million.

Despite the robust result, during a recently held earnings call, executives at Guy Carpenter and Marsh were questioned on the outlook for the reinsurance business in light of accelerated softening, particularly within property, and how this could impact potential organic growth for Guy Carpenter.

“We had a decent finish to the year in a good year overall at Guy Carpenter, in what was a soft market last year. And so, we expected a challenging market into 2026, and certainly the first of the year would indicate that we’re getting kind of what we expected,” said John Doyle, President and Chief Executive Officer (CEO) of Marsh.

He went on to note that this is of course good for the firm’s cedent clients, so buyers of reinsurance, adding that Guy Carpenter has seen demand increase in some spots, which was less evident last year.

“So, we’re excited about that, but we’re also focused on some different areas to advise clients on in the reinsurance and capital space,” said Doyle.

Dean Klisura, President and CEO of Guy Carpenter, also responded to the question, emphasising that the property cat rate environment, alongside the interest rate landscape, will certainly be a headwind for the company as it moves through 2026.

However, Klisura remains “really upbeat” on the fundamentals of Guy Carpenter, with both its talent and capabilities.

“Our data and analytics platform is a key differentiator. We continue to attract top talent at GC. We’ve grown our head count for five years in a row and made some really big time hires in the marketplace that are making an impact on the business. Despite all this… we had record new business in 2025 and a really strong fourth quarter of new business, and we feel good about that momentum,” said Klisura.

The CEO continued, highlighting numerous potential tailwinds, including diverse areas of new business.

“I’ve spoken in the past about capital and advisory, our investment banking group, never more impactful for our clients, given the flow of third-party capital into the marketplace right now. I highlighted that in data centers. We’re winning impactful engagements from our clients around M&A advisory, raising third-party capital, fairness opinions. You’ve read a lot about sidecars, billions of dollars of new capital flowing into the market for the creation of casualty sidecars. We’re right in the middle of that. A lot of client interest, as you know, around Lloyd’s platforms, quite a bit written about that. Structured solutions. Obviously a red hot cat bond market. So, there’s a lot to kind of think about,” said Klisura.

Additionally, Klisura described the casualty market as a “clear growth opportunity for brokers and reinsurers.”

“Even though renewal outcomes were in line with expectations, we think this is a true area of growth. Martin talked about 19% rate increases in casualty in the fourth quarter. That’s flowing straight through to quota share contracts in our portfolio, which is the majority of our portfolio. You think about casualty sidecars, third-party capital, everything happening in the casualty world, we’re seeing strong growth in our casualty portfolio at 1.1. So, we think we have plenty of sources of new business growth and opportunities for growth that maybe didn’t even exist a year ago,” he said.

Doyle added: “We will have headwinds, obviously, for the pricing market in property cat, but lots of areas of growth for us to get focused on.”

One area of opportunity for Guy Carpenter and the Marsh group concerns the emergence and rapid advancement of artificial intelligence, data centres and digital infrastructure more broadly, which were discussed at length during the call, including by Klisura with a view to how Guy Carpenter is supporting the wider Marsh effort in this space.

“This is a significant new business opportunity in 2026 for both cedents and reinsurers,” said Klisura. “There’s been estimates of up to $10 billion of new premium entering the market in 2026 because of these opportunities, and the market needs more capacity. No cedents are going to put up billions of dollars of capacity for a single location risk. So, that’s a real issue. All of our clients want to write data centres across 10 plus products globally, but they require additional reinsurance protections. Everybody’s concerned with accumulations in portfolios, and we’re solving that right now for our clients. And I think we need to bring new capital to the market. It’s not going to just be traditional reinsurance capital, the introduction of third-party capital and securitising some of these risks via sidecars and other vehicles is going to be critical, and these are going to have to be deep pocketed investors, given the size of these risks. But we think this is the single biggest new business opportunity in 2026.”

The post Property cat rates an obvious headwind for Guy Carpenter but there’s ample growth areas: Klisura, Doyle appeared first on ReinsuranceNe.ws.

The firm, which is backed by Redbird Capital Partners, served as lead investor in the launch of George Street Re, a casualty reinsurance sidecar sponsored by global insurer QBE Re.

The transaction, valued at over $550 million, provides Calidris’ investors with a strategic entry point into QBE Re’s global casualty reinsurance portfolio.

The completion of this insurance sidecar transaction represents a significant milestone for Calidris, which was founded in early 2025 by Daniel Miller and Philippe Trahan.

It underscores its execution capabilities and advances the firm’s mission to deliver differentiated access to lower volatility P&C insurance risks for institutional investors, the firm stated.

“Our entry into the market reflects a strong operational foundation and the confidence of high-quality institutional partners,” said Daniel Miller, Co-Founder and Co-CEO of Calidris. “With our first transaction successfully completed, we are focused on building on our momentum by structuring attractive, diversified and scalable partnerships that meet the needs of our investors and insurance counterparties.”

To support the continued growth of Calidris’ platform and rollout of strategic initiatives, the firm has also announced several key leadership hires.

Marcus Foley, a 20 year industry veteran, was appointed Director of Quantitative Strategies. He has previously held C-suite positions for Aspen, Argo and Somers Re groups primarily focused on Risk and Capital Management, Balance Sheet Optimization and M&A.

He will oversee the development and execution of a quantitative strategy roadmap for Calidris, aligning the analytic framework with firm-level growth, return and risk objectives.

Natasha Osborne joins Calidris as Director of Finance and Operations. She brings nearly 15 years of experience, most recently at Hiscox Re & ILS where she focused on third-party capital operations and financial reporting.

Osborne has been tasked with driving operational excellence and financial oversight as the firm grows.

Additionally, Calidris also appointed Andrew Brooks, former CEO of Ascot Group and Deputy Chair and Council member of Lloyd’s, as a Non-Executive Director to its Board.

This move aims to bolster the firm’s governance and executive leadership team with diversified industry expertise and market insight to advance the firm’s long-term strategy.

Philippe Trahan, Co-Founder and Co-CEO of Calidris, said, “We are building a differentiated investment platform centered on alignment and long-term partnerships. The depth of expertise we have added to our leadership team and Board complements our disciplined approach, bringing the skills and insight necessary to support and accelerate the growth of our business.”

“Daniel and Philippe bring an impressive track record as insurance investors and demonstrated structuring experts, creating a strong foundation for Calidris’ business model,” added Robert Klein, President of RedBird Capital Partners. “Now in market with a deal successfully completed, high-caliber leadership team in place and strong investor relationships, Calidris is well positioned to capitalize on growing interest in the P&C (re)insurance space.”

The post Calidris marks market entry with sidecar transaction and leadership expansion appeared first on ReinsuranceNe.ws.

The global credit rating agency turned positive on the reinsurance sector for the very first time in June 2024, citing an expectation of robust reinsurer profit margins and sustained underwriting discipline in the hard market environment.

However, throughout 2025, reinsurance pricing started to soften from the recent highs following the property market reset in 2023, and this trend accelerated at the recent January 2026 renewals, with property catastrophe rates declining by around 15% on average.

AM Best’s revision to stable from positive reflects this increasing pressure on property pricing, which the firm says could challenge the sector’s ability to sustain the strong operating results it has achieved for the past three years.

But while competitive pressures have increased in the property cat space, with supply outpacing incremental new demand at 1.1 2026, sellers do remain disciplined with terms and conditions and attachments largely intact, while reinsurers’ risk-adjusted capital position remains robust as a result of retained earnings and prudent capital deployment.

AM Best explains: “Notably, the significant improvements in terms and conditions that reset following the 2023 renewals are proving durable. AM Best has not observed significantly lower retentions on reinsurance programs. Instead, the changes have been more focused on broadening policy wording and narrowing exclusions. These changes can have a meaningful, but typically lesser, impact than more substantive structural changes to reinsurance programs. Aggregate/frequency products have re-emerged more plentifully than last year but have not returned broadly to pre-hard-market structures. Deployment remains highly selective and analytics-driven.”

According to industry reports, 2025 is yet another year that saw insured losses from natural catastrophes exceed $100 billion, but as noted by AM Best, with the exception of the costly California wildfires in January, the profile of individual events in the year was insufficient to impact reinsurer results in a meaningful way, driven in part by the higher attachment points enforced by the market. As a result, 2025 is expected to be another strong year of profitability with the sector poised to exceed its cost of capital for the third year in a row.

“The sustained period of strong results has led to robust capital generation that has reinsurers searching for opportunities to deploy capacity. Reinsurance capacity is projected to enter 2026 at record levels: approximately USD 540 billion in traditional dedicated reinsurance capital and USD 120 billion in ILS capital, bolstered by a third consecutive year of robust earnings. As a result, competitive pressures have increased,” says AM Best.

Alongside the robust capital position of the sector and continued underwriting discipline, AM Best highlights elevated interest rates and limited new market entrants as other counterbalances to less favourable trends impacting the marketplace.

“Reinsurers are still benefiting from elevated reinvestment yields, even as central banks begin an easing cycle. Current yields remain above those of longer-dated bonds now maturing from legacy portfolios, allowing reinsurers to steadily lift investment income while the higher cost of capital continues to reinforce underwriting discipline,” says AM Best. “Inflation trends, monetary policy shifts, and broader geopolitical uncertainty leave the future path of interest rates unclear. Still, with most non-life portfolios concentrated in the three- to five-year duration range, reinsurers are positioned to earn relatively elevated levels of interest income for several more years, providing a durable tailwind even if headline rates begin to drift lower.”

Additionally, the rating agency describes life reinsurance as a diversifying pillar for some as it provides stability and diversification against the volatility of property and casualty books.

Although, another key area of concern for reinsurers is the casualty space, with certain lines still presenting challenges as unpredictable jury verdicts in the US continue to drive social inflation amid an uneven tort reform landscape.

Expanding on casualty reinsurance, AM Best says: “Several reinsurers strengthened casualty reserves in 2024 and 2025 and AM Best expects this trend to continue in 2026. In some cases, unfavorable loss reserve development in long-tail lines has been partially or entirely offset by favorable development from property, specialty, and workers’ compensation reserve releases, although the buffer derived from potential excess reserve positions in other lines may be diminishing.

“Capacity limits have been reduced and rate hikes continue to be observed in the most volatile lines, such as commercial automobile, general liability, and excess liability, but systemic risks nevertheless remain unresolved. Whether the meaningful pricing gains seen for the past several years are keeping pace with loss cost trends is questionable. Casualty therefore remains a fragile area of opportunity, balancing investor appetite for diversification against mounting volatility.”

While there’s clearly greater competitive pressure for reinsurers in 2026, and a likelihood of further property rate reductions at the April and mid-year renewals, AM Best says that, overall, “market conditions support underwriting profitability and solid overall operating performance in 2026.”

“Reinsurers nevertheless face a complex and challenging operating environment, particularly in the US casualty space. Assuming catastrophe experience remains within modeled expectations, AM Best expects the segment to generate returns sufficient to at least cover its cost of capital, supported by robust investment income and profitable underwriting performance sustained by continuing careful risk selection and portfolio allocations within the context of an increasingly challenging pricing environment. The Stable outlook reflects the market’s structural improvement in recent years, and its ability to balance profitability with stability in an ever more complex risk environment,” says the rating agency.

The post AM Best shifts global reinsurance outlook to stable as property rates soften and casualty issues persist appeared first on ReinsuranceNe.ws.

According to the firm’s latest renewal report, the US casualty reinsurance market experienced largely stable conditions at January 1, despite a liability loss environment still shaped by social inflation, with overall capacity steady and no material change in the number of active reinsurers.

Meanwhile, the trend towards greater syndication reportedly continued, reflecting, Howden explained, typical line-size constraints and the high number of markets competing for shares on programmes.

Expanding on the US casualty reinsurance market, the firm’s report continued, “Another important factor in the renewal process was the expanding role of casualty ILS and sidecars, which are now being actively pursued by many cedents, particularly those able to offer large, stable portfolios that appeal to investors.

“In addition to increasing supply, these vehicles are also removing some premium from the open market, reducing the amount cedents need to place traditionally. Whilst this has not yet had a meaningful impact on the traditional casualty reinsurance market, a continuation of the trend could begin to influence supply-demand dynamics over time.”

Elsewhere, Howden reported that reinsurers were looking to increase allocations in the US casualty market at renewal as property rates eased and catastrophe-exposed premiums contracted.

Clients continued to show strong interest in whole-account deals combining property and casualty lines, seeking more efficient transaction structures, Howden observed.

Most treaties renewed at expiring terms on January 1 2026, and cedents with robust data and a proven track record are said to have successfully negotiated higher ceding commissions, with some achieving increases of 0.5–1 point.

Conversely, loss-affected accounts faced commission pressure and reduced shares as reinsurers sought to offset elevated claims.

Howden noted that loss development from 2014–19, alongside more recent accident years, heavily influenced 2026 negotiations.

Ongoing reserving concerns and adverse trends are expected to sustain casualty rate increases of 8–9%. Despite rising costs, demand for protection remains strong, leaving the US casualty market well-positioned.

Turning to the international casualty market, Howden said this space experienced modest softening at 1 January renewals, with widespread price reductions due to increased capacity and a generally stable loss environment.

“Programmes with US exposures faced more challenging renewals with outcomes sensitive to loss volatility associated with nuclear verdicts. Programmes showing signs of loss deterioration typically saw pricing increase,” the firm said.

Howden continued, “Buyers in London market casualty benefitted from strong supply, with incumbents looking to deploy capacity not used in the property market to meet broader growth targets. The market also saw increased participation from several US and Bermudian reinsurers.

“This reflected another year of strong performance, with results still benefiting from reduced line sizes following Decile 10 and the subsequent hard market. Whilst claims inflation and falling rates are beginning to drive modest deterioration, claims activity has been limited, which has tempered any experience account deterioration.

“With underlying account dynamics remaining broadly stable, reinsurer results continuing to be profitable and capacity plentiful, London casualty excess of loss programmes recorded risk-adjusted reductions of 5-10% at 1 January 2026 renewals.”

The post Howden observes improved supply/demand dynamics at casualty reinsurance renewals appeared first on ReinsuranceNe.ws.

The casualty reinsurance renewals had nuanced outcomes based on region, structure, historical results and the scale of the outwards portfolio renewing at January 1, with reinsurers prioritising portfolio diversification and long-term relationships, rewarding cedents for structural discipline and historical performance, notes the broker.

According to Guy Carpenter’s ‘January 1, 2026 Reinsurance Renewal Report’, clients continue to remain disciplined with respect to limit management, terms and conditions being offered to their original customers, and maintaining appropriate attachment points.

“While pricing varies from positive (US exposed liability) to negative (E&O/PI, non-US exposed liability) and everywhere in between (US D&O), the structural changes that clients have implemented within their portfolios are giving greater confidence for re/insurers in the face of continued increases in US litigation costs,” analysts noted.

As a result of this discipline, reinsurer loss trends remained relatively stable year-over-year, as shorter limit deployment is proving very effective at managing loss severity trends.

The report highlighted that loss experience and structure were the two keys to renewal outcomes.

“Reinsurers are much more comfortable offering support on a pro-rata basis, as they have greater confidence in overall portfolio performance. As a result, if experience and portfolio composition are in line with expectations, pro-rata placements renewed per expiring,” the report stated.

Continuing: “Slight improvements occurred if there was a clear case of outperformance, but new capacity was needed as incumbent capacity generally reduced. Corrections were made on a case-by-case basis if results were materially worse than expected, with cross-line of business and placement trades readily occurring.”

Regarding excess of loss placements, the report noted that they had varied outcomes around the world. Attachment point was a key factor for this outcome, particularly where historical experience has been challenging and inadequate credit provided to the go-forward strategy.

“Lower attaching programs (particularly those in the US) felt more pricing pressure, due to the impact of litigation funding and claim severity. We saw rate increases of approximately 10% on these programs,” analysts explained.

Adding: “Higher-attaching treaties had less rate pressure, as the higher attachment points and reduced limit profiles had the combined beneficial impact of less experience and, more importantly, less exposure in the layer holding pricing flat to even some modest rate reductions in exceptional circumstances.”

The report also identified a softening trend in the Asia Pacific, Middle East, and Africa markets. Increased competition and capacity from European and Bermudian carriers seeking geographic diversification have led to more favourable terms for cedents in these regions.

While renewals in the US and international markets trended slightly ahead of the 2025 cycle, the Asia Pacific region moved more slowly as participants navigated these softening conditions.

Moreover, the traditional casualty market continues to adapt to the rise of alternative risk transfer (ART), as clients weighing alternative options such as sidecars against the benefits of traditional structures.

“In some cases, this reduces the amount of the placement in the traditional market, which, when coupled with substantive capacity, allows for a lower market clearing price for the reinsurance program,” analysts said.

Concluding: “Guy Carpenter’s analysis demonstrates improved health of the US casualty market, with cumulative rates exceeding trend by 64 points, based on developed losses from 2019 onward.

“In addition to significant rate improvement, US carriers have been disciplined with limit deployment, reducing average capacity between -40% to -60%.”

The post US casualty reinsurers prioritise portfolio diversification and long-term relationships at 1.1: Guy Carpenter appeared first on ReinsuranceNe.ws.

Korra connects insurers, MGAs, reinsurers, and institutional investors through an integrated suite of applications and AI-driven workflows that support the full reinsurance lifecycle – from pricing and structuring to performance reporting and valuation.

Ledger has been developing the Korra technology stack internally since 2021. It has used it to structure, execute, and service over 170 casualty ILS transactions, representing over $7 billion in gross written premium.

Korra is now introducing that proven technology, refined through real-world application, to the wider market as an independent platform.

A comprehensive tech stack, the Korra platform is divided into four key products, including: Korra Marketplace, which facilitates digital transactions by connecting risk with capital; Korra Analytics, provides actuarial and data science capabilities to forecast performance and estimate deal value.

Additionally, Korra Reports automates the ingestion of bordereaux data and visualises financial statement and collateral calculations; and Korra Contracts leverages AI to transform complex contracts into structured data, enabling natural language querying and downstream automation.

“Korra is an end-to-end solution that meets the pre and post transaction needs of risk originators and capital providers,” said Umair Rasool, General Manager of Korra. “Customers can start in the application that solves their biggest problem today, knowing that the data created in one app is immediately available across the platform – reducing duplicate work, reconciliations, and manual handoffs between point solutions.”

Rasool continued, “It can also connect into your existing non-Korra and legacy systems, so one decision unlocks a network effect across the rest of your technology stack.” “We built Korra because we needed it ourselves,” said Samir Shah, Co-founder and CEO of Ledger Investing.

“We were in the trenches as a broker, risk modeler, asset manager, and collateralized reinsurer, processing complex casualty transactions at scale. That experience forced us to solve real operational, data and analytics problems. We’ve iterated on this technology deal by deal.”

Following the launch of Korra, the Ledger group of companies has been re-organised, establishing two primary operating divisions: Korra, the SaaS platform, and Ledger Investing, a reinsurance brokerage and advisory firm.

The post Ledger Investing to bring AI and efficiency to reinsurance & ILS market with Korra appeared first on ReinsuranceNe.ws.

This week, Everest reported its third quarter 2025 financials, revealing a strong performance for its reinsurance business.

However, the Group result was negatively impacted by unfavourable reserve development in its insurance arm, as Everest strengthened its US casualty reserves, primarily focused on accident years 2022 to 2024, driven by elevated loss experience in excess casualty and US liability lines.

At the same time, in the firm’s Other segment, prior year incurred losses and LAE rose to $146 million, driven by US casualty lines, primarily from the company’s sports and leisure business.

In light of the challenges surrounding its casualty business in recent times, Everest has taken action to “define its strategic direction and position the company for improved performance.”

This includes the sale of all the rights to renew its US, UK, European, and Asia Pacific Commercial Retail Insurance businesses to insurer AIG, and a new $1.2 billion adverse development reinsurance transaction with Longtail Re.

Commenting on these arrangements in Everest’s earnings release, Williamson said: “These actions will provide meaningful flexibility to deploy capital toward share repurchases, strategic opportunities, and selective investments in talent, technology, and data that will enhance our competitive edge. The go-forward Everest is a more focused, higher-return enterprise anchored in Reinsurance and Wholesale & Specialty Insurance, built on underwriting excellence, balance sheet strength, and disciplined execution.”

Unsurprisingly, casualty was a hot topic on Everest’s Q3’25 earnings call, with analysts eager to learn more about the rationale and what this means for the re/insurer going forwards.

Interestingly, one analyst questioned Everest on whether there’s any potential risk of spillover into its reinsurance business, and why the firm is confident the reserves within its casualty reinsurance book will hold.

“I would really begin by resetting the premise, because these are two very different portfolios, and one of the things I’ve been really honest about during the course of this process is where our insurance casualty book performed on a historical basis. And I would characterise it bluntly as squarely in the bottom quartile of performance in our industry,” said Williamson.

“Whether I observe our own results, if you talk to brokers who have a fair bit of data, industry observers, there is a huge distinction in performance between bottom quartile underwriters and top quartile underwriters, and I think that’s played out over all market cycles in all lines of business. So, we were bottom quartile, and we fixed that and I think over time, that portfolio is going to perform really well. And I think it will be an asset to our partner, AIG, as they take it on. So, that’s one point.

“The other is, I would not expect, based on the fact that we write a top quartile reinsurance portfolio, there’s no basis to expect that portfolio to perform in the same way that a bottom quartile portfolio would perform. Now, yes, it’s subject to the same issues around social inflation and things of this nature, but the top quartile underwriters, they were consistently doing what we’ve done over the last year in insurance, which is very closely managed limits, ensure that you’re getting top pricing for the exposures you’re taking, carefully selecting classes of business to write, leaning on loss sensitive features to align interests with your clients. All of those things that we’ve talked about as part of the remediation. That’s what our reinsurance clients have consistently done throughout the cycle. And so, there’s just no reason to expect those portfolios to operate in a similar fashion over time,” explained the CEO.

The post No basis to expect Everest’s casualty reinsurance to mirror insurance portfolio: CEO Williamson appeared first on ReinsuranceNe.ws.