Gallagher Re's 1st View: July 2025 Renewal Sees Competitive Market Shift

Gallagher Re's report, 1st View: Challenging the Status Quo, provides an overview of the reinsurance market conditions during the July 1, 2025, renewal season. According to Gallagher Re, buyers generally experienced a more competitive market environment compared to recent years, with adequate capacity available even where demand increased.

Per Gallagher Re, clients largely secured risk-adjusted rate reductions for property treaties and managed to hold pricing broadly flat in casualty lines, aided by continued flow-through of underlying pricing increases to reinsurers. The report noted that reinsurers entered the renewal in strong financial condition, with total reinsurance-dedicated capital reaching $769 billion at year-end 2024.

According to the report, reinsurers reported robust 2024 results, with returns on equity well above the cost of capital, despite first-quarter challenges stemming from unprecedented wildfires in Los Angeles. Gallagher Re said that, barring further significant catastrophe events, reinsurers are positioned for another profitable year in 2025.

Per Gallagher Re, the market dynamics at the July renewal reflected an environment where cedants and brokers had increased room to maneuver, with reinsurers demonstrating flexibility in property aggregates and per-risk terms. The report highlighted that North American casualty lines continued to benefit from multiyear compound rate increases and enhanced loss mitigation measures.

According to the report, reinsurers are actively seeking to deploy their substantial capital, though they remain disciplined in protecting profitability in certain segments and geographies. Gallagher Re said that this balance of supply and demand has shifted in favor of buyers, challenging the status quo and allowing for optimization in reinsurance placements beyond just rates.