Weather catastrophes dominated the loss landscape, accounting for 93% of overall damages. The United States faced particularly severe impacts, with hurricanes Helene and Milton striking Florida in quick succession. Hurricane Helene inflicted $56 billion in damages, while Milton caused $38 billion in losses, with $25 billion covered by insurance.
“By harnessing the power of AI and comprehensive data sets, we have been able to take a more informed approach to presenting and underwriting risk. This approach has enabled us to deliver scalable reinsurance capacity at an accessible premium, adding critical coverage for businesses that were largely unprotected,” Steve McGill CBE, Founder and CEO of McGill and Partners, said in a press release.
Peacock identified multiple factors contributing to the escalating insurance costs in California. “You’ve got more expensive real estate, you have more real estate built … into the fire zones, and then there are all manner of conditions and situations in California that make that even more challenging,” he said. He also highlighted the inflationary pressures driving up the costs of both homes and cars, making repairs and purchases more expensive. Furthermore, the risk of extreme weather events, such as wildfires, has increased, complicating the ability to set appropriate insurance rates in the state.
“As in other parts of the world, in Australia, too, insurance premiums for properties in high-risk areas – like flood-prone regions or bushfire zones – have skyrocketed and hundreds of thousands of homes could become ‘uninsurable’ by the end of the decade,” said Schanz, director of social and financial inclusion.
Neal’s leadership coincided with significant global challenges, including Brexit, the COVID-19 pandemic, inflationary pressures, and geopolitical uncertainties. He worked to address these issues while promoting the insurance industry’s role in supporting sustainability efforts, including climate change initiatives.
“So, being able to identify the markets that have the appetite, have the capacity, and are looking for ways to deploy it is probably one of my biggest tasks. And since joining Delos, we’ve had significant engagement with a number of partners already in the market but also possible future partners in the market.”
According to Guy Carpenter’s figures, the Global ROL Index fell 6.6% compared to 2024, while the US index decreased 6.2%, the European index declined 5.3%, and the APAC index dropped 7.2%. Guy Carpenter noted that these results will be updated at key renewal dates through 2025.
According to its report, non-loss-impacted property catastrophe renewals also saw notable reductions in the risk-adjusted reinsurance rate at January 1, with the rate reductions ranging from 5% to 15%. The reductions in rates, as well as additional capacity, reflected strong reinsurer appetite, which was driven by several factors, such as 2024 being a profitable year due to projected average returns on equity of 17.3%.
Specialty reinsurance in marine and energy, cyber, aviation and war, political violence, and terrorism lines benefitted from the strength of the results seen in underlying portfolios and ample capacity. However, the trade credit and political risk market were still facing capacity restraints as renewals saw modest changes to pricing and terms in excess-of-loss and pro rata programmes.