Global insurer AIG had another strong renewal season at 1.1 2025, with Chairman and Chief Executive Officer (CEO), Peter Zaffino, stating that since the reinsurance sector’s major reset at the January 2023 renewals, the firm’s consistency, strategy, placement, and execution has positioned it “very favourably.”
Zaffino discussed the primary insurer’s 1.1 reinsurance renewal outcomes during a recent earnings call following the release of a solid set of results.
The CEO described AIG’s 1.1 2025 renewal as “very strong”, explaining that the carrier was able to maintain its prior objective for its reinsurance purchasing strategy, which is to preserve and optimize capital and enhance the quality of earnings through active management of the volatility of its underwriting results.
As broker reports highlighted, property reinsurers were eager to deploy more capacity at 1.1 amid higher retentions and commensurate pricing increases, although Zaffino stressed that sellers were mostly focused on upper layers with more remote return periods.
“Depending on loss activity, limited additional demand led to risk-adjusted rate reductions that were consistent with expectations, with the bottom catastrophe layers renewing flat to down 5%, and upper catastrophe layers receiving reductions of 10% to 15%,” said Zaffino.
AIG has comprehensive reinsurance programmes for its property and casualty operations, and has worked in recent years to restructure its buying strategy, which Zaffino explained has played a key role in its journey to establish AIG as “an industry leading global P&C underwriter.”
Starting with the company’s property catastrophe reinsurance placements, Zaffino revealed today that its core commercial North America retention of $500 million remains unchanged, in nominal terms, for the third year running, despite the underlying portfolio being larger.
“We also expanded coverage and maintained our core international occurrence attachments and renewed our dedicated occurrence tower for our high-net-worth business, which attaches at $200 million,” said Zaffino. “We improved our $500 million of aggregate protection by reducing the annual aggregate deductible for North America, creating a specific non-peak section, and expanding the coverage for the high-net-worth portfolio.”
Overall, for North America, Zaffino said that depending on loss distribution, the company’s modelled net first loss exposure, including the impact of reinstatement premiums, is actually comparable to 2024, and its second and third event exposure is materially lower following this renewal cycle.
“For all of our major proportional treaties we were able to improve or maintain our ceding commission levels, a strong recognition of our underwriting expertise, and our position as a market leader across multiple classes,” continued Zaffino.
Additionally, AIG established two new proportional treaties at 1.1 2025 for its high-net-worth portfolio.
“Our strategy to establish private client select as a standalone MGU, and introduced capacity to support growth in the platform beyond AIG’s balance sheet has been validated with the addition of five of the leading underwriting companies in the world to the platform, taking 30% of our homeowners and auto portfolios through quota share reinsurance,” he explained.
Regarding the carrier’s casualty reinsurance renewals, the CEO noted that the market remains an area of caution for many reinsurance companies, with little appetite for the risk.
“They are highly selective of the insurance companies they support, and overall, the casualty renewals were more orderly for the companies that have strong underwriting portfolios. We were pleased with the successful renewal of our core casualty treaties at favorable terms,” said Zaffino.
Adding: “This renewal cycle, again, signals the strong, external industry recognition that AIG continues to be a leader in the casualty market. We remain optimistic on the outlook for our casualty portfolio and see considerable opportunities ahead, while being cautious and very focused on maintaining our high underwriting standards.”
During the call, Zaffino also singled out the December 2024 launch of Syndicate 2478 at Lloyd’s, which commenced underwriting from January 1st, 2025, supported by third-party capital from funds managed by Blackstone.
“This pioneering structure… is an example of how insurance risk can be directly connected to sophisticated investors to generate attractive returns for both parties. The syndicate provides AIG with a long-term, meaningful reinsurance partner and an additional source of fee income. Blackstone has access to a high quality, well diversified underwriting portfolio with the ability to generate attractive returns by taking a sizable participation in the majority of AIG’s outward reinsurance treaties at market terms. We’re pleased to partner with a leading global asset manager on this innovative structure,” said Zaffino.
“Our reinsurance strategy has played a pivotal role in our journey to establish AIG as an industry leading global P&C underwriter. We’re grateful for the long term support and partnership of the industry’s leading reinsurers which has helped position us where we are today,” he concluded.
