Reinsurance Renewal Pricing

Reinsurance is insurance for insurance companies — reinsurers (Munich Re, Swiss Re, RNR) take on a slice of risk from primary insurers in exchange for premium share. Contracts reprice on fixed dates — Jan 1, Apr 1, Jun 1 are the big ones. Chart shows rate changes vs prior year. The 2023-25 hard market (rising prices) peaked Jan 2023 at +30%; Jan 2026 showed the first 10-15% declines as capital flooded in.

Reinsurance renewal rate changes at Jan 1, Apr 1, and Jun 1 dates, 2020-2026. Hard market peaked at Jan 2023 (+30% loss-free property cat, +55% loss-hit). First broad softening at Jan 2025 (-5%); Jan 2026 saw a deeper -10 to -15% decline on loss-free property cat as record reinsurer capital exceeded buyer demand. Casualty stayed positive throughout the cycle on US social-inflation concerns. Sources: Guy Carpenter Global Property Cat ROL Index, Howden Renewals Report, Gallagher Re 1st View, Aon Reinsurance Market Dynamics.

Reinsurance Retention Ratio

Retention ratio = net premiums kept ÷ gross premiums written. Shows how much of the insured risk a reinsurer holds on its own balance sheet vs cedes (passes on) to other reinsurers ("retrocession"). Higher retention = more confidence in pricing + more capital at stake. 2024 data — Berkshire retains 96.5% because its balance sheet can absorb the volatility alone.

2024 net-to-gross premium retention ratio (NPW / GPW) for the world's largest reinsurers. Berkshire retains nearly all premium (96.5%) since it has the balance-sheet capacity to absorb the volatility. Lloyd's sits lowest (~73%) because of the syndicate-level retrocession structure. RenaissanceRe and Arch use third-party capital vehicles to manage net exposure. Source: 2024 10-K filings and annual reports.

Cat Bond Issuance & Spreads

Catastrophe ("cat") bonds are securities sold to investors that pay normal coupons unless a defined disaster (hurricane, earthquake) hits — at which point investors lose principal and the issuer keeps the cash for claims. Alternative to traditional reinsurance. Chart shows annual issuance ($B) and spread over expected loss (the risk premium investors demand). 2024 set a record $17.7B; outstanding crossed $50B in 2025.

Primary issuance ($B) - left axis

Avg risk-adjusted spread (%) - right axis

Annual catastrophe bond primary issuance and average risk-adjusted spread over expected loss. Issuance doubled from ~$8B/yr pre-pandemic to a record $17.7B in 2024; outstanding ILS market crossed $50B for the first time in 2025. Spreads peaked in 2023 at 8.5% during the hard market and have since compressed to ~5.5-6% as capital chased attractive returns. Source: Artemis.bm quarterly cat bond reports.

Reinsurance Combined Ratios

Combined ratio = claims + expenses as % of premiums; below 100% = profit, above = loss. Annual ratios for the US-listed reinsurers (EG, RNR, RGA, ACGL). The soft market of 2017-2020 (oversupply of capital, low pricing) drove ratios to 100-120% on heavy cat years; the 2022-25 hard market (pricing power restored) brought them down to 78-95%.

Annual GAAP combined ratios for four US-listed reinsurers, 2018-2025. The 2017-2020 stretch ran 100-120% on consecutive heavy cat years; the 2022-2025 hard market drove ratios down to 78-95%. Arch (ACGL) has consistently outperformed peers thanks to its mortgage and specialty mix. RNR posted a sub-80 ratio in 2023 - one of the best years in reinsurer history. EG spiked back above 100 in 2024 on conservative reserve additions for prior-year US casualty. Sources: 10-K filings.

Reinsurance Renewal Pricing

Reinsurance Retention Ratio

Cat Bond Issuance & Spreads

Reinsurance Combined Ratios

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