Around the 2025 Baden-Baden Reinsurance Meeting, Dave Egan, reinsurance broker Gallagher Re’s Head of International Property Practice Group , highlighted that in order to maintain relevance and foster growth, reinsurers need to expand their offerings beyond traditional catastrophe coverage.
He stated: “I think there are huge opportunities for reinsurers here, in terms of selling what clients want to buy. It’s adding to their existing relationships with their partners, just by growing their relevance. We are seeing a number of markets looking to write international property cat, property per risk, casualty and speciality lines, as they work to become more relevant to their core cedents.
“Whether that’s looking at property aggregates, or investigating parametric offerings, cedents are looking to maximise their partnerships across all that they buy, and if reinsurers want to grow, that is the perfect place to do it.”
Egan stressed that diversification not only strengthens relationships with key clients but also provides a crucial portfolio-wide balance that can help mitigate losses.
According to Egan, the central theme of this year’s Baden-Baden will be market conditions, which are currently dominated by record capital levels and a strong desire for profitable, sustainable growth from reinsurers.
He said clients should take advantage of the current market environment by clearly communicating their needs and leveraging their partnerships to secure the best possible terms.
“I think that market conditions will be the most prevalent topic when talking with our clients. We see record capital levels, and I think what we know from reinsurers is that there is a desire for growth, whether that’s profitable or sustainable,” Egan said.
He continued: “What it means for our clients, and when we’re talking to them and they’re talking to reinsurers, is that they should be setting out what it is they want from reinsurers at Baden-Baden, and look to utilise their partnerships to maximise what it is they want to purchase.”
In recent years, insurers have seen their share of losses from Nat Cat events increase due to higher attachment points and the removal of aggregate protections as reinsurers looked to mitigate volatility.
Clients should revisit their strategies to balance out these risks, Egan said. This includes re-evaluating their retention levels, exploring frequency protections, and considering products like property aggregates.
Despite a significant natural catastrophe event at the start of this year – the LA wildfires, which was a heavily reinsured cat event – Egan stated that the reinsurance market remains sustainable.
“Since this significant Nat Cat event, we’ve actually had quite a benign year. As we sit here at Q3, we’re actually below the average Nat Cat results across the recent history. When we talk about the reinsurance market being sustainable, according to our projections, 2024 and 2023 were record years for reinsurers, but 2025 is looking like it’s going to be the second best year in the last decade,” Egan noted.
He added: “We’re projecting 17 to 18 percent return on equity (ROE). So, I believe reinsurers absolutely have a sustainable market and model with which they can work within right now.”
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