Hannover Re, the reinsurance group, shared its latest insights on global re/insurance markets during the 2025 Monte Carlo Rendezvous.
Recent attacks on commercial shipping in the Red Sea have had limited financial impact but highlight the ongoing risks from war and terrorism.
Hannover Re also noted an increase in conventional shipping accidents during the first half of 2025, including off the coast of India.
Despite these uncertainties, the group observed that insurance and reinsurance markets remain competitive. Moderate price reductions were recorded in 2025 renewals due to increased capacity, though overall pricing levels remain sufficient. Hannover Re expects this trend could continue into 2026 depending on claims experience.
In aviation reinsurance, Hannover Re reports broadly stable conditions. Proportional treaties show little change, while isolated single-digit rate reductions are seen in non-proportional business. These adjustments do not yet reflect the implications of recent events, such as the Russian leasing losses ruling, the full effects of which remain unclear.
Hannover Re highlighted developments in both airline and general aviation segments. The airline market may benefit from improved primary insurance conditions, potentially reinforced by recent losses, whereas the general aviation sector has seen price declines. Product liability terms remain stable, while the space insurance market has hardened following significant losses in 2023 and 2024, compounded by the limited number of major launches and low overall premium volumes.
The company emphasised continued activity in insurance-linked securities (ILS). Hannover Re transferred multiple catastrophe bonds to the capital market for clients. After thirteen transactions totalling USD 4.0 billion in 2024, seven deals worth USD 2.0 billion have already been completed in the first half of 2025.
These bonds cover natural catastrophes, including windstorms and earthquakes. Hannover Re also partnered with the North Carolina Insurance Underwriting Association and GC Securities to launch the first catastrophe bond potentially funding homeowners’ resilience measures.
Parametric cloud outage coverage, initially placed as a catastrophe bond last year, was again issued at increased volume, demonstrating investor demand for well-structured risks and providing cedants with additional capacity.
Looking ahead, Hannover Re plans to launch Hannover Re Capital Partners (HCP), a Bermuda-based underwriting agency. HCP will write non-proportional catastrophe business backed by third-party capital, leveraging Hannover Re’s global client network and expertise.
Hannover Re concludes that structured reinsurance demand remains stable despite growing competition. The company considers these solutions essential for providing solvency relief and managing earnings volatility for clients worldwide.
“With this innovative cat bond, Hannover Re, in close cooperation with its partners, has brought a new feature to the insurance-linked securities market that for the first time provides funds to help build more disaster-resistant communities,” added Silke Sehm, Executive Board member for property and casualty reinsurance.
“If we want to effectively mitigate the costs of catastrophes, we must not only work on increasing coverage but also invest in adaptive measures. This placement combines both elements and should serve as a blueprint for more such transactions.”
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