Insurers worldwide retain more risk as reinsurers limit low-layer cover

Life insurers face long-term pressure as they shift toward retirement-focused products.

Insurers worldwide face a varied outlook across key sectors, with natural catastrophe losses, capital shifts, and product changes shaping expectations into 2025, according to S&P Global Ratings’ “Three Key Trends We’re Watching” report.

In the property/casualty (P/C) sector, rising nat cat losses are pushing insurers to raise premiums and reduce coverage, especially in high-risk and regulated markets.

With reinsurers pulling back from low-layer protection, primary insurers are retaining more risk, particularly in personal lines.

Reinsurers are expected to expand their use of third-party capital—such as cat bonds and insurance-linked securities—to manage exposures in peak zones. 

This capital is also moving into areas like cyber and mortgage reinsurance, supporting pricing momentum through upcoming renewals.

Life insurers face long-term pressure as they shift toward retirement-focused products like annuities. 

Whilst demand remains strong, greater exposure to market risk and limited repricing flexibility are likely to cap future rating improvements.