AM Best is the only rating agency that has maintained its positive outlook on the global reinsurance sector, and Greg Carter, Managing Director, Analytics, at the company’s briefing at RVS 2025 today, stressed that if now is not a positive market, when is?
In contrast, AM Best, who turned positive on the space in the middle of last year, has maintained its positive outlook on global reinsurance, with the firm highlighting still strong property cat rates when compared to pre-2023 levels, while terms and conditions and attachment points remain largely flat as discipline remains. AM Best expects these trends to persist.
During AM Best’s RVS briefing held earlier today, Carter was questioned on the firm’s still positive outlook, in light of shifts from peers.
“Undoubtedly the trend is, as I said, we’ve come past the peak, so we’re in a softening market. If you want to call that the trend and say well that’s not positive, you can,” he said. “I think it’s our view… the return on equity is well above the cost of capital and we expect that to continue through ’25, and if discipline remains, we’ll see that through 2026 as well.”
“If now is not a positive market, when is? Apart from the last two years, reinsurers would rather be underwriting in today’s environment than anything in the past 12, 15 years,” added Carter.
2025 is expected to be another strong year for the reinsurance market in terms of profitability, with many looking for and achieving growth as demand for coverage remains elevated in an uncertain world where annual insured losses from natural catastrophes now consistently exceed $100 billion.
As noted by Carter, ROEs are strong and although property cat pricing has softened from the highs of 2023, it’s not a soft market by any means.
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