Year-to-date, reinsurance giant Swiss Re has seen a net price reduction of 1.5%, and although it’s clear the reinsurance sector is at the beginning of a softening cycle, it’s still an attractive marketplace, according to Anders Malmström, Swiss Re Group Chief Financial Officer (CFO).
This morning, Swiss Re announced a solid performance for the first quarter of 2025, with a rise in net income and P&C reinsurance combined ratio of 86%, despite elevated large claims from natural and man-made disasters, driven by the California wildfires in January.
The company also provided an update on its experience at the April 1st, 2025, reinsurance renewals, during which it grew volumes 2.8%, with Swiss Re reporting an overall price increase of 1.5%. However, loss assumptions increased by 3.7% on a prudent view on inflation and updated loss models, meaning the net price change was actually -2.3%.
During a recent call with the media, Swiss Re Group CFO Malmström was questioned on the pricing outlook for the key mid-year renewals, which are focused on the US.
“It’s always hard to predict,” said Malmström. “We have to go through the process. And as I said, we focus on bottom line, that’s most important for us. If I take year-to-date, and I like to take year-to-date from the renewals, because April was mostly APAC and Japan, so gives an indication that is say not the full picture.
“So, the net price reduction year-to-date was 1.5%, that’s probably something that we should expect going forward. Does it go further or not? I think it’s to be seen. We don’t know, but I think you clearly see the beginning of a softening cycle. But I would say it’s still attractive.”
His comments reflect reports from brokers and comments from other carriers that reinsurance rates have softened so far in 2025, although it’s important to remember they’re coming off of a high base after the reset in 2023 when property rates surged and terms and conditions tightened and attachment points rose.
So, while conditions are seemingly more favourable to buyers than in 2024 and 2023, large players like Swiss Re clearly feel pricing dynamics remain in a good enough place to pursue growth.
Further, the mid-year renewals have a focus on regions hit by losses in 2024 and early this year, notably the wildfires in California, so it will be interesting to see the overall rate trend at 1.6 and 1.7 given the potential for both increases and decreases.
