Global insured losses reached nearly US$70 billion in the first half of 2025, according to Guy Carpenter.
Despite ongoing economic volatility, the firm reported that key trends observed during the Jan. 1 renewals have persisted into mid-year, including strong reinsurer capital positions, increasing capacity in the property market, sustained pricing moderation, and disciplined casualty underwriting.
The second quarter saw a slowdown in insured losses compared to the first quarter. Total losses in the first six months of 2025 are now aligned with the inflation-adjusted five-year average.
A significant driver was the Los Angeles wildfires, which generated US$40 billion in insured losses, accounting for 59% of total first-half activity. These losses are not expected to materially affect reinsurer capital or dampen appetite for the remainder of the year.
Reinsurer returns on equity stood at 16% in 2024 and are forecasted to reach 15% in 2025. Total reinsurance capital ended 2024 at a record US$607 billion. Guy Carpenter anticipates capital growth of between 5% and 7% by the end of 2025.
Guy Carpenter president and CEO Dean Klisura (pictured above) said the trading environment has drawn additional capital into the sector, offering a chance to rebalance market dynamics to benefit clients.
“More capacity will continue to moderate pricing, give clients more diversification of reinsurance partners, and provide better solutions to protect earnings,” Klisura said.
Property catastrophe capacity remains robust. Reinsurers were able to meet a 5% to 7% increase in client demand for property catastrophe limits. Overall, capacity exceeded demand by more than 20%, leading to risk-adjusted rate decreases between 5% and 15% for programs without recent losses. Programs impacted by losses saw rate increases between 10% and 20%.
Supporting this trend, Guy Carpenter reported earlier this year that the global property catastrophe Rate on Line (ROL) Index declined by 6.6% in 2025 compared to the previous year. Regionally, the index showed decreases of 6.2% in the United States, 5.3% in Europe, and 7.2% in the Asia-Pacific region.
The firm also highlighted the growing importance of property contract coverage analysis, with efforts to use AI and data science to monitor trends, enhance benchmarking, and improve consistency across the market.
The catastrophe bond market also reflected these dynamics. In 2024, the 144A catastrophe bond market saw activity across 67 different bonds, totaling US$17 billion in limit placed.
This figure is consistent with the 2025 mid-year report, in which US$17 billion of limit was placed through 56 property catastrophe bonds and one health catastrophe bond in the first half alone. Guy Carpenter noted that the continued interest in cat bonds underscores the market's appetite for risk transfer mechanisms outside traditional reinsurance channels.
Additional risk factors are also shaping industry outlooks. For the 2025 North Atlantic hurricane season, Guy Carpenter has forecast an above-average level of activity. This outlook is based on warmer-than-average sea surface temperatures and the anticipated transition to La Niña conditions, both of which are associated with more frequent and intense tropical storm formation.
Casualty reinsurance renewals in spring 2025 were shaped by two main factors. Reinsurers and clients evaluated their trading relationships across multiple program lines, while underwriting adjustments by carriers improved the economics of proportional casualty programs.
These programs, where primary insurers share premiums and losses with reinsurers, generally renewed with flat to slightly reduced ceding commissions following nearly two years of reductions.
Excess of loss placements in casualty continued to face upward rate pressure due to rising loss severity and resulting volatility. Rate increases for these placements ranged from 10% to 20%, with individual outcomes varying by portfolio characteristics.
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