Insurers brace for volatile earnings in 2025

Reinsurance demand during the renewals was fueled by volatile loss experiences.

Insurers are forecasted to face continued earnings volatility this 2025, as they brace for catastrophe losses – specifically from convective storms, floods and wildfires – due to persistently high attachment points, Howden reported.

“The reliance on price alone is no longer enough,” David Howden, Founder and CEO of Howden, noted. 

“The dawn of a new cycle presents fresh opportunities as insurers look for new business, particularly in areas like cyber and renewables,” he added.

Howden has released its 2025 market report, “Past the Pricing Peak”, signalling a shift in the (re)insurance sector after a prolonged period of rate increases. 

The report attributes this change to increased deployable capacity and favourable supply dynamics, leading to risk-adjusted rate reductions in several areas during the 1 January reinsurance renewals.  

Last year, competition in both commercial insurance and reinsurance markets intensified, supported by strong price adequacy and an expanding appetite from traditional reinsurers and capital markets. 

This surplus capacity softened pricing, particularly during the renewals, whilst underscoring the growing importance of data transparency and granular approaches by reinsurers.  

Key trends in 2025 renewals  
Reinsurance demand during the January renewals was fueled by volatile loss experiences, rising exposures, and updated risk models. 

At the same time, heightened competition drove risk-adjusted rate reductions across several lines, despite persistent catastrophe risks.

Differentiation by client and programme was a notable feature of the renewals, as reinsurers prioritised tailored solutions.