Gallagher Re’s CEO, Tom Wakefield, has highlighted robust global reinsurance capital and manageable loss ratios as the market heads towards the 67th edition of the Rendez-Vous de Septembre (RVS) in Monte Carlo this week, emphasising that effective cycle management will be critical for navigating volatility and sustaining profitability in an increasingly complex market.
“Our position as a leading reinsurance intermediary is to match originators of risk with capital providers. But the nature of both groups has changed drastically over the last few years,” Wakefield observed.
He continued, “Both originators and capital providers need a partner that truly understands the opportunity set in front of them and has the analytical and technical ability to execute effectively.
“We’ve seen developments in the ILS market, including sidecars and other third-party capital vehicles, launched to satisfy both clients’ and reinsurers’ growth ambitions.
“We are confident we can help our clients achieve the best results when it comes to quantifying, managing, and mitigating their risks.
We live in an era of unprecedented data availability. Clients are bombarded with information daily, and a crucial part of our role is interpreting that data and turning it into practical, actionable insights.
“We focus on insights rather than data, because the challenge for leaders today is not data itself, there is more of it than ever, as technology has democratised access, but performance spreads remain wide.
“Some in the market have tried to solve this by building, buying, or bolting on tools to aggregate and analyse client data.
“We have taken a long-term view: several years of investment have resulted in a new client platform, designed as a single digital ecosystem of interconnected platforms for placement, modelling, structuring, and visualising risk, all underpinned by a single data lake.
“The result for clients will be bespoke, differentiated insights delivered in real time, leading to faster decision-making and better outcomes.”
As the industry looks toward Monte Carlo, Wakefield noted that the reinsurance market remains strong, with healthy profits and capital levels. However, he pointed out that while reinsurers have capital to deploy, insurers are finding it challenging to absorb this capacity.
Rate increases are slowing, which means growth in underwriting income will now depend more on expanding exposure or improving profit margins. Optimising reinsurance strategies can be a key part of achieving this.
“Clients today have a wide range of choices in optimising their risk management. Attachment points, structural innovations such as frequency covers, expanded peril coverage, shared limits, coverage changes, pricing, and duration, all will be discussed as clients look to optimise buying strategies. Investor pressure is growing, particularly as the re/insurance market transitions. Investors are focusing more on share buybacks and M&A, so reinsurers seeking growth will offer products that help clients achieve their strategic objectives while supporting volatility protection at acceptable levels of risk transfer,” Wakefield said.
He went on, “We’ve also seen the increasing importance of total client relationship value and the trade-offs required to keep it in balance. In general, reinsurance loss ratios remain manageable despite elevated natural catastrophe losses, $69.5 billion in the US in H1 2025, including $40 billion from wildfires.
“Year-to-date, global cat losses have already hit $90 billion as of late July and are on track to surpass $100 billion for the eighth time since 2017. Yet the market remains healthy, with global reinsurance capital at $805 billion through mid-2025.
“To put this in context, it would take a $115 billion insured loss event, on top of 2025’s current cat losses and normalised natural catastrophe stresses, to reduce ROE for the 2017–2025 period to low single digits.
Ahead of Monte Carlo, Wakefield noted that property is a hot topic influencing many market themes. He stated that in the property catastrophe markets, supply is significantly outpacing demand, leading to rate decreases in the high single digits to low double digits, as seen in the 2025 renewals.
According to Wakefield, this pricing pressure is most pronounced at the top of programs but varies by client and region.
Wakefield also said that demand for new capacity is slowing, with only a modest increase of about $10 billion globally (a 2% rise) expected. Despite this, he highlighted that structural innovations have played a key role in improving product flexibility for buyers.
In casualty, the CEO observed that the market is largely divided between the US and the rest of the world. In the US, he noted that reserve strengthening has been ongoing, and the industry appears to be nearing the end of the 2019-and-prior reserve cycle.
Wakefield considers this a positive development as it helps resolve claims from 2014 to 2019. He pointed out that underlying rates have increased for six consecutive years, and significant changes in underwriting strategies have been implemented, suggesting that the future will look very different from the recent past. However, Wakefield said that concerns remain about non-economic inflation and societal issues like litigation funding.
The CEO concluded, “Central to discussions this renewal season is the financial health of insurers and reinsurers. Hopefully, you’ve had a chance to read our Reinsurance Market Report published earlier today.
“To recap: global reinsurers continued to build capital in H1 2025, supported by retained earnings. Profitability remains strong on both a reported and underlying basis, comfortably above the cost of capital.
“Strong combined ratios and investment returns support robust capital levels, which can absorb volatility. Assuming normalised cat losses for the remainder of the year, we expect full-year 2025 ROE of 17–18%, at least in line with 2024.
“The search for profitable growth will be paramount at this stage of the cycle, and effective cycle management will be critical for clients to perform well.
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