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Fitch Ratings reports that reinsurers have varied views on pricing in 2025. However, a majority of those surveyed expect rate hikes.
Why it matters: January reinsurance renewals typically set the tone for pricing in the primary insurance market. So, if reinsurance rates go up, companies and individuals will likely see higher premiums, too.
- Primary insurers in the U.S. include companies such as State Farm, Allstate, and Progressive.
By the numbers: Fitch Ratings surveyed reinsurers during their September gathering in Monte Carlo.
Over half of the 81 reinsurance market participants said global reinsurers would increase prices during 1/1 renewals.
- 30% of respondents expected prices to rise by more than 5%
- 26% of respondents believe prices will increase by less than 5%
- 22% of respondents predict prices will be unchanged
What they’re saying: “Only 22% of respondents thought prices would fall, but Fitch shares their view,” the rating firm said. “We believe the pricing cycle has most likely passed its peak and we expect a softer market in 2025 due to the sector’s abundance of capital.”
What we’re watching: The casualty sector appears to be the least appealing for reinsurers in 2025. Fitch said it expects double-digit price increases for casualty reinsurance programs.
In another report, Fitch said, “Reinsurers’ concerns that market prices are too low is leading them to prune their exposure and limit capacity in the lines of business most affected by adverse loss development.”
