This content is copyright to www.artemis.bm and should not appear anywhere else, or an infringement has occurred.

Artemis has learned from sources that the vast majority of principal from insurtech Kin’s $175 million Hestia Re Ltd. (Series 2022-1) catastrophe bond is expected to be returned to investors at the upcoming risk period end, while just $5 million will be retained with an extended maturity date to cover any potential loss development.

The Hestia Re 2022-1 catastrophe bond had been exposed to possible losses due to the impacts of hurricane Ian, the largely Florida storm from later in that year of issuance.

Initially after hurricane Ian’s landfall, given the Florida wind focus of this insurance-linked securities (ILS) transaction and the reinsurance protection it provided to sponsor Kin, the $175 million of Hestia Re 2022-1 cat bond notes had been marked down to bids of less than 10 cents on the dollar on some secondary cat bond sheets.

There was, however, a relatively wide-dispersion in the views taken by secondary cat bond trading desks.

In an update we reported that, after hurricane Ian, some pricing sheets had the Hestia Re 2022-1 notes marked for bids as low as 5 cents on the dollar, others still had them marked only 20% down, while one still held them at a mark of 92.

As we also explained at the time, in October 2022, Kin’s reinsurance from the Florida Hurricane Catastrophe Fund inured to the benefit of these Hestia Re 2022-2 cat bond notes, which effectively lifted their attachment point, on a gross loss basis.

As a result, it was challenging for secondary market broker desks and for us to really understand just how exposed the notes were at that time, which likely drove the wide-dispersion in marks in cat bond pricing sheets at that time.

In early 2023, Kin revealed that it ceded around 97% of its gross losses from hurricanes Ian and Nicole in 2022 to its reinsurance capital partners.

At that time, the Hestia Re 2022-1 cat bond notes were marked down still on pricing sheets, for bids of between 70 and 80.

The pricing of the notes continued to recover over-time, resulting in them being marked down for bids in the low to mid-90’s as recently as the first-quarter of 2025.

However, with the scheduled maturity for these notes due later this month, we’ve now learned that out of the original $175 million of principal from the Hestia Re 2022-1 cat bond notes, the majority is now set to be returned to investors holding them.

We’re making the assumption that hurricane Ian has been the only catastrophe event in the risk period for these notes that was seen as a threat for possible attachment of the cat bonds’ coverage. As Kin’s losses from the 2024 storms Milton and Helene were seen to have far lower impacts on the company.

We’re told by sources that $170 million, so some 97% of the outstanding principal, is now expected to be returned to investors, with just the remaining $5 million now set to face an extension of maturity.

Given the notes are marked below 95 across the majority of pricing sheets we’ve seen, it suggests a return of capital greater than the price suggests, which investors will welcome.

For Kin, this likely means the insurer now has much greater clarity of its potential ultimate loss from hurricane Ian (again, presuming that is the event of relevance), giving it the confidence to return the capital and only extend maturity for a 3% sliver of the outstanding notes.

That extension of $5 million will allow Kin some room to make a recovery still, should its losses creep any higher and attach the Hestia Re 2022-1 catastrophe bond notes.

We understand the remaining $5 million of notes will have their maturity date extended for four years, up to April 2029 and the $170 million is expected to be returned to investors after the final risk period ends later this month.

It seems reasonable to assume Kin will have clarity to make a recovery, or return some more of the principal, in advance of that long extension date.

You can read all about the Hestia Re Ltd. (Series 2022-1) catastrophe bond from Kin and every other cat bond deal issued in our extensive Artemis Deal Directory.

Details of catastrophe bonds facing losses, deemed at risk, or already paid out, can be found in our cat bond losses Deal Directory here.

Kin’s Hestia Re 2022-1 cat bond to repay $170m majority of principal back to investors was published by: www.Artemis.bm
Our catastrophe bond deal directory
Sign up for our free weekly email newsletter here.

This content is copyright to www.artemis.bm and should not appear anywhere else, or an infringement has occurred.

Skyline Partners Ltd., a parametric insurance specialist, has announced a new project in collaboration with the European Space Agency’s Business Applications and Space Solutions programme to leverage space-based technology for the development of parametric insurance solutions for drought and wildfire risks on a global scale.

By utilising satellite data and advanced space assets, the initiative aims to streamline access to parametric insurance, enabling risk carriers to enter the market without the need for significant upfront investment in expert personnel, data, or technology.

Moreover, the project aims to enable the transformation of parametric drought and wildfire coverage from a niche area of the insurance sector to a substantial line of business.

Skyline Partners Co-Founder and Executive Director Laurent Sabatié, commented: “As the triggers and indices used for parametric insurance become more complex to ensure coverage best matches the needs of insureds, the market is continuously exploring new sources of data which can help us to improve parametric products.

“We are delighted to have engaged with the European Space Agency to investigate the possibilities of using space assets to build resilience through insurance.”

Skyline Partners Co-Founder and Executive Director Gethin Jones, said: “It’s superb to be working with ESA. As uncertainty builds across the planet, it’s imperative that we harness new data sources which can be relied upon to underpin the financial instruments we use to help the world build resilience.. We are excited to work with the Agency to develop ways to apply space assets to the world’s practical challenges.”

Ana Raposo, Business Applications and Partnerships Officer at the European Space Agency, added: “We are delighted to support Skyline Partners to advance the application of space assets for the improvement of parametric insurance projects and products and look forward to a highly fruitful collaboration.”

Skyline Partners & European Space Agency team for parametric wildfire & drought solutions was published by: www.Artemis.bm
Our catastrophe bond deal directory
Sign up for our free weekly email newsletter here.

This content is copyright to www.artemis.bm and should not appear anywhere else, or an infringement has occurred.

While the mid-year reinsurance renewals are forecast to see further softening of between 5% and 10% as a base case, according to analysts at Evercore ISI, the team there asks whether subrogation potential for the January California wildfires could make the renewals even more competitive?

Reinsurance renewals so far in 2025 have seen pressure on pricing, with rates-on-line declining in general as the well-capitalised industry demonstrates its ambition to continue deploying capacity to grow portfolios while pricing remains at still historically elevated levels.

But commentary has been suggesting that the key mid-year reinsurance renewals, at June and July 1st, when much of the Florida property catastrophe reinsurance and US treaties are renewed, could see reduce rate pressure because of the significant losses flowing through the reinsurance market from this year’s Los Angeles wildfire event.

With those wildfires still estimated to have caused an insurance industry loss of anywhere between $35 billion and $50 billion, it has been expected that they would have some effect on renewals for US programs and reinsurer appetites.

Aon noted this week that as much as between $11 billion and $17 billion of the wildfire losses is expected to be ceded to reinsurance capital providers, as a result of which 25 percent to 33 percent of major reinsurers’ annual catastrophe allowances may have been absorbed by the fires.

However, Gallagher Re said that reinsurance capacity has been ample to support US nationwide renewals at April 1st, with price reductions seen and some more aggregate limit being deployed as well.

So, while the wildfires have been impactful they don’t seem to be changing the trajectory of reinsurance pricing, but could be preventing softening happening faster.

We were told by sources that US property catastrophe reinsurance renewals for April 1st saw more differentiation dependent on loss experience and with the recent California wildfires being factored in to decision-making.

It does seem though that the wildfire losses may not be having sufficient effect to outweigh the influence of the weight of capital in the reinsurance market, which might suggest that the Evercore ISI analysts base case of -5% to -10% at the mid-year renewals is a decent forecast.

However, while not part of the base case, the Evercore ISI analyst team highlight another important factor to consider, the potential for subrogation claims and recoveries to be made after the wildfires.

As we reported back in January, the topic of potential recoveries from subrogation of claims was raised in relation to the Eaton fire, with electrical utility Southern California Edison in focus as questions arose over whether its equipment may have caused any of the blazes.

While legal action has been started, so far there hasn’t been any official determination of liability related to the Eaton fire.

But, the Evercore ISI analyst team rightly point out that the Eaton wildfire is expected to make up around one-third of the industry loss from the wildfires, on which basis it could be somewhere between $11 billion and close to $17 billion of the total market loss.

With Aon estimating that $11 billion to $17 billion of the total industry loss would be ceded to reinsurance capital providers, should subrogation come into play the ceded figure related to the California wildfires could also be reduced, perhaps meaningfully.

Resulting in a commensurate drop in how much of the traditional reinsurers catastrophe budgets have been eaten up by the wildfires, while also allowing many insurance-linked securities (ILS) funds to free up more of their capital as well, after the flow of subrogation.

All of which could have the effect of leaving the reinsurance and ILS sector even better capitalised in time for the mid-year renewal season, if a determination is made on any liability for the Eaton fire before that date.

The result of which could be reinsurers and ILS funds coming to the mid-year renewals with increased appetites, driving greater competition and perhaps amplified softening of rates.

The Evercore ISI analysts muse, “We wonder if subrogation potential for LA fires will push down insured losses and
result in a more competitive renewal.”

Which is worth watching out for over the coming months. The latest from SoCal Edison is that the electrical utility began a new phase of inspections and testing of electrical equipment in Eaton Canyon on March 17th, which it said could take some weeks and is being done in coordination with fire investigators.

However, the utility also said (in a statement from March 14th), “SCE does not anticipate having an immediate update following the upcoming inspection and testing and continues to expect the full investigation to take several months to complete.”

Which suggests that the reinsurance industry may not know whether subrogation claims are going to be warranted, let alone rewarded, by the time of the mid-year renewals.

Could wildfire subrogation drive more competitive mid-year renewal? Evercore ISI asks was published by: www.Artemis.bm
Our catastrophe bond deal directory
Sign up for our free weekly email newsletter here.

This content is copyright to www.artemis.bm and should not appear anywhere else, or an infringement has occurred.

Reinsurance sidecars have continued to gain in popularity and brokers have commented today on the expansion of this third-party investor supported segment of the insurance-linked securities (ILS) market, seeing it as one area driving robust capital growth into 2025.

Previously, Aon Securities estimated that the outstanding market for collateralized reinsurance sidecar structures had reached a new record high of $10 billion in a report from September 2024, which that broker’s capital markets unit said represented roughly 40% growth on the prior year.

While, AM Best and Guy Carpenter put the reinsurance sidecar market at between $6 billion and $8 billion, as of the middle of 2024.

Then, after the January renewals this year, Gallagher Re said that reinsurers within the EMEA regions had been offering more capacity, in part empowered with ILS-fueled new sidecar capacity.

Now, in commentary published in April reinsurance market reports, both Gallagher and Aon have again highlighted the collateralized reinsurance sidecar as an area of continued expansion, within third-party or alternative forms of ILS capital.

Gallagher Securities, the capital markets and ILS arm of Gallagher Re, said that, “Sidecars have continually gained in popularity, with Gallagher Securities observing nearly a roughly 50% increase in issuance YOY.”

This broker said, “Cedants are increasingly forming partnerships with investors through sidecars and related vehicles, driven by investor demand for access to premium flows from insurance risks.”

Adding that, “This interest is now extending beyond traditional property catastrophe risks to include casualty and other non-cat ILS risks and using innovative structures, signaling a strong future for the sidecar market.”

Aon’s Reinsurance Solutions and its Aon Securities arm also commented on the continued high-levels of activity in the reinsurance sidecar space in its new market report.

Aon also explained that new inflows to sidecar structures are seen as one of the key drivers for alternative reinsurance capital growth, alongside catastrophe bonds.

As we reported, Aon sees alternative or ILS capital in reinsurance as having reached $115 billion by the end of 2024, a figure that has likely grown with the robust catastrophe bond issuance seen in Q1 2025.

Aon said, “In addition to the robust growth of the catastrophe bond market, the broader ILS market has seen further growth in sidecar capital, pushing alternative capital to nearly $115 billion.

“Increased investor appetite has allowed many traditional reinsurers to expand their sidecar and/or catastrophe bond programs, enabling the deployment of additional capacity.”

This broker continued to explain that, “Sidecar capacity has also grown, in line with what we’ve seen over the prior two years. New entrants to this market—many of whom are well-regarded underwriters—have developed new platforms, creating exciting opportunities for investors. Further, existing sidecar offerings (e.g., Everest’s Mt. Logan) continued to expand from reinvigorated marketing efforts and strong returns over the past two years.

“The sidecar market has also grown beyond natural catastrophe risk to long-tail casualty opportunities, generating interest from new types of asset managers looking to manage more long-term capital.”

However, Aon also noted that the January 2025 California wildfires will cause losses for many reinsurance sidecar structures.

Saying, “The sidecar market, on the other hand, will be impacted by the wildfires, given that these contracts are typically structured as a pro-rata share of non-proportional reinsurance portfolios.

“While it’s too early to tell how the wildfires will impact the overall returns of the property sidecar market, it’s reasonable to assume a negative return during the first quarter of 2025.”

Find details of numerous reinsurance sidecar investments and transactions in our directory of collateralized reinsurance sidecars transactions.

Reinsurance sidecar market seen ~50% bigger by Gallagher. Aon notes Q1 wildfire impacts was published by: www.Artemis.bm
Our catastrophe bond deal directory
Sign up for our free weekly email newsletter here.

This content is copyright to www.artemis.bm and should not appear anywhere else, or an infringement has occurred.

The lawsuit filed by Porch Group against broker Gallagher Re regarding the Vesttoo reinsurance letter of credit (LOC) collateral fraud has been dismissed with prejudice by the Texas court. But Porch has said it intends to continue to pursue recourse in the matter.

Porch Group is the owner of insurer Homeowners of America Insurance Company (HOA), a company that particularly affected when the Vesttoo reinsurance letter of credit (LOC) collateral fraud caused financial impacts to the firm.

Porch had filed a lawsuit against broking group Arthur J. Gallagher, claiming its reinsurance arm Gallagher Re had “grossly mismanaged” the administration of a reinsurance arrangement subject to collateral posted by Vesttoo that turned out to be fraudulent.

As we later reported, Gallagher responded to the lawsuit and the complaint made by Porch, urging the Texas court to dismiss the petition “in its entirety and with prejudice.”

Porch had then responded, rejecting broker Gallagher’s motion to dismiss the legal case, saying it believed the company had failed to satisfy the obligations of their contract.

In a judgement filed this week, it was “ordered, adjudged, and decreed that this action and all claims by Plaintiff Porch.com, Inc. against Defendant Gallagher Re Inc. are dismissed with prejudice.”

The judgement also decrees, “That Plaintiff take nothing against Defendant; that all relief not granted is denied unless applicable law allows a party to seek some type of postjudgment relief; and that all allowable and reasonable costs are taxed against Plaintiff.”

Referring to arguments made by Gallagher Re in its motion to dismiss the case, the order concludes that the sole breach of contract claim made by Porch against the broker is dismissed with prejudice, while a contact claim against the broker’s parent AJG is denied as moot, as AJG had been voluntarily dismissed from the action.

So closes another chapter in the Vesttoo saga.

In response to an Artemis enquiry to the companies, a Porch spokesperson said, “We will continue to vigorously pursue recourse in this matter, including via all available legal and other processes,” while Gallagher Re declined to comment.

Whether Porch continues to pursue Gallagher Re specifically remains to be seen. But the company is persisting in its efforts to recover more of the value it lost and damages it suffered due to the Vesttoo letter of credit collateral fraud from other avenues.

As a reminder, Porch recently secured a $7.1 million settlement over constructive trust claims with the Vesttoo Creditors Liquidating Trust in relation to so-called constructive trust claims linked to a reinsurance transaction.

The insurer continues to pursue a court case against China Construction Bank, claiming its staff were complicit in the reinsurance collateral fraud, as well.

Read all of our coverage of news related to the fraudulent or forged letter-of-credit (LOC) collateral linked to Vesttoo reinsurance deals.

Porch complaint against Gallagher Re over Vesttoo fraud dismissed with prejudice was published by: www.Artemis.bm
Our catastrophe bond deal directory
Sign up for our free weekly email newsletter here.

This content is copyright to www.artemis.bm and should not appear anywhere else, or an infringement has occurred.

Aon’s Reinsurance Solutions division forecasts increased demand for property catastrophe reinsurance protection in the United States at the key mid-year renewal season, with additional limit of as much as $7.5 billion expected to be sought out by cedants, much of which will be for risks in Florida.

However, the broker also expects the mid-year renewals will see “pent-up supply still outstripping demand”, from the very-well capitalised reinsurance and insurance-linked securities (ILS) markets.

Commenting on the April 1st renewals just completed Aon said, “A competitive reinsurance market resulted in improved pricing for most insurers at April 1 renewals, driven by enhanced reinsurer results and relatively benign natural catastrophe loss activity across the region.”

Adding that, “These buyer-friendly conditions are expected to continue through the mid-year reinsurance renewals, supported by robust levels of capacity and reinsurer appetite.”

Global reinsurance capital reached a record high of $715 billion in 2024, Aon said, helped by expansion of the catastrophe bond market and alternative capital rising to a new high of $115 billion.

George Attard, CEO APAC for Reinsurance Solutions at Aon, commented, “At April 1 our clients continued to benefit from favorable reinsurance market and pricing conditions, supported by Aon’s extensive advocacy, analytical and transactional expertise.

“We expect to see opportunities for insurers to explore frequency protections and top-up covers as we approach the mid-year renewals, especially for those insurers that concentrate on the key characteristics of high performance.”

Attard added, “Across the board, facultative capacity has increased and reinsurers are competing more aggressively, creating greater opportunities for insurers to use facultative reinsurance to support growth plans and manage volatility.’

Attard further commented on the outlook for the mid-year reinsurance renewals at June and July, when much of the US business and a particular Florida focus, as well as treaties in Australia and New Zealand are always key features of the negotiations.

“Heading into the mid-year renewals, we expect over $7.5 billion of additional U.S. property catastrophe limit demand, mostly due to a healthier Florida market and the depopulation of the state windstorm insurer Citizens,” Attard explained.

Further stating that, “We also anticipate some additional reinsurance purchasing from U.S. national carriers looking to mitigate further major net losses during 2025.”

Aon’s Reinsurance Solutions said that it expects demand for property cat reinsurance limit in Florida to rise by between $4 billion and as much as $5 billion at the June 2025 renewals.

An expected increase in the Florida Hurricane Catastrophe Fund (FHCF) attachment (by around $1.4 billion), is anticipated to drive additional buying below the FHCF, while some vendor model changes will also support increased demand for reinsurance and so will Citizens depopulation as more risk moves to private insurers.

Aon notes that reinsurance capital continues to grow and is expected to keep up with demand, so no shortage of capacity is expected for the mid-year renewal season.

However, the company also explained that after the significant California wildfire losses earlier this year, with as much as between $11 billion and $17 billion being ceded, “These losses have absorbed 25 percent to 33 percent of major reinsurers’ annual catastrophe allowances which may affect how some come to the market at mid-year.”

The reinsurance broker added that, on the client side, “For insurers, current market dynamics are creating opportunities to explore frequency protections and top-up covers in an increasingly favorable pricing environment. Some clients are taking advantage of favorable market conditions and securing capacity at attractive rates ahead of mid-year renewals.”

Which is a trend seen in the catastrophe bond market, with more US limit placed in the first-quarter of the year and a number of sponsors coming to market earlier than typical.

Early signings are likely to remain a feature in the run-up to the June and July reinsurance renewal season, on which Aon said, “Opportunity exists to pursue off-cycle additional protection from reinsurers looking to deploy capital not taken up during January renewals. In addition, reinsurers will be keen to write premium to earn back losses accrued in the first quarter.”

Given the additional limit set to be demanded for reinsurance renewals at the mid-year, this presents opportunities for the insurance-linked securities (ILS) market.

Catastrophe bonds can be expected to absorb a proportion of this, as too while private ILS strategies focused on collateralized reinsurance.

With Florida in focus for the highest increase in property cat limit demand in 2025, that being ground-zero for the deployment of ILS capacity it is to be expected the market takes its share.

However, it’s always worth remembering that an incremental $7.5 billion of limit being required will not equal that sum in additional capital being deployed, given the leverage of the rate balance-sheet and levered ILS strategies.

Read all of our reinsurance renewals news and analysis.

US property cat demand to rise ~$7.5bn at mid-year renewals, Florida taking up to $5bn: Aon was published by: www.Artemis.bm
Our catastrophe bond deal directory
Sign up for our free weekly email newsletter here.

This content is copyright to www.artemis.bm and should not appear anywhere else, or an infringement has occurred.

While the April 1st reinsurance renewal is a smaller affair for property catastrophe accounts in the United States, broker Gallagher Re reports a wide-range of pricing outcomes, dependent on loss experience, with risk-adjusted rates on-line falling as much as 15% for loss free accounts, or rising as much as 15% for catastrophe loss hit.

“In a relatively light renewal period, nationwide account dynamics were broadly a continuation of the themes witnessed at the 1.1.2025 renewals,” Gallagher Re explained.

Adding that, “Reinsurers were highly focused on the impact of the January Californian wildfires, with buyers focused on differentiating both approach to the peril / geography and the outcomes from the event(s).”

However, impacted renewals were small in number and outcomes at the April reinsurance renewal for US cedants were highly dependent on loss experience and also program size.

Catastrophe loss free accounts property catastrophe reinsurance rates on-line came in with -5% to -15% reductions, on a risk-adjusted basis, Gallagher Re reports.

But, catastrophe loss hit US accounts saw property cat rates ranging from flat to +15%.

Risk loss free property reinsurance treaties renewed from flat to -5%, while risk loss hit property renewals saw rates-on-line ranging from +5% to as much as +20%, Gallagher Re said.

Which drives home the wide-range of outcomes and the influence of losses on property and property catastrophe reinsurance appetites and pricing at this time.

Despite the wildfires in January, Gallagher Re noted that capacity for US property catastrophe risks remained ample at the April 1st 2025 renewals.

Buyers took advantage of the increased capital supply to hold their retention levels constant, and push price reductions at the top end of their towers, typically the most competitive layers.

Due to increased capacity for property risks, Gallagher Re said there was increased demand for aggregate covers at the renewals with more placements seen as well.

“Several carriers sought to bolster existing aggregate programs, while others looked to establish new programs. That said, these aggregate protections continued to be pitched at the capital preservation, not earnings protection level,” Gallagher Re explained.

Read all of our reinsurance renewals news and analysis.

US property cat renewals see wide range of pricing outcomes at April 1st: Gallagher Re was published by: www.Artemis.bm
Our catastrophe bond deal directory
Sign up for our free weekly email newsletter here.

This content is copyright to www.artemis.bm and should not appear anywhere else, or an infringement has occurred.

Howden Re has reported that risk-adjusted catastrophe excess-of-loss (XoL) reinsurance rates-on-line for Japan saw reductions of 10-15% at the April 1st 2025 reinsurance renewals, as pricing “eased from a high base” and sellers sought to protect or grow positions at the renewal amidst higher competition and greater supply.

Risk-adjusted rate reductions in Asia-Pacific (APAC), combined with varied specialty renewal outcomes, reflects “hard market softening” at the Japan-focused April renewals, according to the reinsurance broker’s latest analysis.

With many property catastrophe reinsurance treaties having experienced relatively loss free outcomes for the last contract year, a continuation of January’s softening trend had been largely anticipated for the April renewals, as we reported.

“There were 10-15% risk-adjusted reductions on catastrophe excess-of-loss programmes, whilst global specialty and direct and facultative reinsurance placements varied by class,” the broker added.

The broker also revealed that both Japanese wind and earthquake XoL pricing adjusted from a high base at the April renewals, following consecutive years of market-driven and post-loss hardening, which began in 2018 and 2019 following the impacts of typhoons Jebi, Hagibis, Trami, and Faxai.

You can see Howden Re’s updated rate-on-line index chart for Japanese catastrophe excess-of-loss reinsurance contracts below:

“The natural catastrophe loss landscape in Japan and the Asia-Pacific region in 2024 was subdued relative to previous years, contributing to moderation at renewals,” Howden Re explained.

“The most significant losses of the last 18 months have been the Noto earthquake in January 2024, the Taiwan Hualien earthquake in April and Typhoon Yagi in September.”

Additionally, there had been some debate across the industry surrounding the potential impact of the January 2025 California wildfires on the Japanese April 1 renewals, however, Howden Re notes that the event, while impactful to reinsurer operating performance, did not “meaningfully constrain supply at 1 April.”

Overall, for Japanese catastrophe XoL programmes, less limit was purchased at the lower end of programmes with some buyers of coverage seeking additional top-layer reinsurance limit to address specific risk concerns, Howden Re continued.

The broker also noted, on average, ceding commissions for proportional quake cover increased by approximately two percentage points, signalling improved terms for cedants, as per-risk commissions varied by programme performance.

However, despite rate reductions of up to 15%, Howden Re says that “Japan remains an attractive market for reinsurers due to its high volume, relatively uncorrelated risk and deep pool of underwriting expertise backed by experience and exposure data.”

Andy Souter, Head of Asia Pacific, Howden Re International, commented: “This renewal is, on balance, a welcome reprieve for buyers in Japan and throughout Asia-Pacific on the back of an extended period of significant rate increases. With the recent easing in pricing and stable renewals, it’s a good time for cedents to secure more favourable terms and address specific risk concerns.”

Further in Howden Re’s analysis, the broker highlighted how the price moderation witnessed in most classes of business at the April renewals was facilitated by rising levels of dedicated reinsurance capital and strong insurance-linked securities (ILS) inflows, while also noting that capital levels now exceed their previous peak.

“This increase has been bolstered by record catastrophe bond issuance, which has continued in earnest during the first quarter of this year. Whilst reinsurers have reported healthy earnings and strong book value growth, it is becoming clear that future gains will increasingly depend on strategic innovation, rather than pricing momentum alone,” the broker added.

You can see Howden Re’s estimates for reinsurance and ILS sector capital levels in the chart below, which shows the significant growth seen in recent years:

David Flandro, Head of Industry Analysis and Strategic Advisory, Howden Re, commented: “At this stage of the pricing cycle, profitable growth increasingly requires a greater focus on product development, underwriting strategies and capital management.

“In order to navigate this market phase, comprehensive, integrated capabilities spanning treaty, facultative, MGAs, strategic advisory and capital markets, Howden Re is uniquely positioned to support cedents and reinsurers as they navigate this next critical phase of the cycle.”

Howden Re’s April renewal report also revealed mixed outcomes at April 1st for the global specialty reinsurance sector, primarily driven by ongoing uncertainty around war-related losses and macro volatility.

The broker explained that aviation reinsurance risk-adjusted pricing was largely flat at April 1st, showing a slight hardening compared to the 3.5% year-on-year decline seen at the January renewals earlier this year.

Moving over to the marine and energy space, Howden Re states that the downstream losses experienced in 2024 had little impact on programmes at April 1st, although the Baltimore bridge collapse remained in focus, due to the incident taking place within days of last year’s renewal and was therefore largely unaccounted for.

Although wildfire exposures were widely discussed, Howden Re noted that within the marine and energy space, specie was the main focus.

Switching attention over to terror, reinsurance rates reduced further amid softening on the direct side of the market.

“Consistent event definitions continued to provide stability in an otherwise evolving market. New capacity is simultaneously seeking entry through the MGA channel on both the insurance and reinsurance side, as observed in previous renewal cycles,” Howden Re explained.

On the other hand, the direct & facultative (D&F) market “continues to show resilience with strong demand for excess-of-loss capacity despite early 2025 loss activity,” says Howden Re.

The broker explained that reinsurers demonstrated greater pricing discipline at April 1st, compared to January 1st, particularly in response to California wildfire exposures which were largely retained by cedents.

Chris Medlock, Director, Global Specialty Treaty, said: “The April renewal reflected a broad range of outcomes across specialty and D&F lines. Whilst pricing softened in some areas, reinsurers remained selective and disciplined. Capacity was available but placement success depended on structure, exposure and underlying risk quality.”

Read all of our reinsurance renewals news and analysis.

Japanese property cat rates down by as much as 15% at April 1: Howden Re was published by: www.Artemis.bm
Our catastrophe bond deal directory
Sign up for our free weekly email newsletter here.