Reinsurance capacity has expanded globally and pricing is easing, with Bermuda playing a central role in supplying property market capital, according to Aon’s latest Global Insurance Market Insights report.
The report described the current reinsurance environment as “ample” and increasingly competitive, contributing to double-digit rate reductions across many markets.
Aon said that the softening is “driven by two years of profitability and retained earnings rather than a change in fundamentals.” The report noted that there has not yet been a significant influx of new capital into the traditional reinsurance sector.
Bermuda and London were identified as key sources of new property market capacity, which are “fueling widespread rate reductions” for well-managed risks in the United States, Britain, Europe, and Australia.
Bermuda’s position as a global reinsurance hub is further underscored by ongoing growth in its re/insurance sector. According to the Bermuda Monetary Authority, three new companies were registered in August, bringing the year-to-date total to 41 new insurers. This pace puts the market on track to surpass last year’s total and reflects continued momentum in the sector.
Much of this activity is being driven by the insurance-linked securities market, with 16 restricted special purpose insurers and eight collateralized insurers established so far this year. The sector’s expansion also includes new captives, life reinsurers, and a long-term insurer, illustrating Bermuda’s diverse and evolving reinsurance landscape.
Read more: Bermuda re/insurance maintains momentum
Despite catastrophe losses reaching at least US$100 billion in the first half of 2025 – the second-highest total on record – Aon said the market remains resilient. Losses this year were driven by convective storms and wildfires in the US, as well as Hurricane Melissa, which the report described as one of the strongest Atlantic hurricanes ever recorded.
The Bermuda Monetary Authority’s 2025 Global Financial Crisis Stress Test found that most companies in the Bermuda long-term reinsurance sector are maintaining capital levels well above regulatory requirements. The BMA concluded that strong initial capitalization and effective risk management practices are positioning the sector to withstand severe financial shocks.
Aon noted that while Hurricane Melissa is expected to affect Caribbean market conditions, it is unlikely to trigger a global hardening of reinsurance prices. Mike Merlo, chief claims officer for Aon Commercial Risk Solutions in the US and Bermuda, commented on the ongoing changes in the claims landscape, emphasizing the importance of proactive collaboration and communication with insurers’ claims personnel.
The report also highlighted the rising adoption of artificial intelligence, alternative capital, and innovation in claims handling as defining trends for the coming year.
