The reinsurance industry has shown significant improvements in operating performance in recent years. Despite facing substantial insured natural catastrophe losses globally, reinsurers achieved robust earnings growth in 2023 and 2024 exceeding their cost of capital. This is largely attributed to structural changes introduced in early 2023, alongside favorable pricing in reinsurance markets.
However, adverse developments in certain U.S. casualty loss reserves remain a key risk for the industry.
Based on these improvements, the reinsurance sector entered 2025 with a robust capital position, bolstered by excellent underwriting performance in short-tail lines, solid net investment income, and recovering fixed-income asset values over the past two years. In turn, we think global reinsurers are well positioned to manage the elevated natural catastrophe losses seen in first-quarter 2025, alongside the recent financial market volatility, and so maintain our stable view of the sector.
Global reinsurers will see a limited hit from declines in global equity markets, following tar…