The global specialty reinsurance sector capped off a remarkable 2025, with the RISX Net Total Return Index delivering a 22.3% total return despite a backdrop of geopolitical volatility, growing trade barriers and high catastrophe losses, according to data by the Insurance Capital Markets Research (ICMR).
This performance has not only solidified the index’s reputation as a robust proxy for the Lloyd’s of London market but has also seen it significantly outperform broader global equity benchmarks.
The 22.3% return outperformed major indices including the MSCI World, which posted a 21.3% return, and the S&P 500, which trailed further behind at 17.7%.
The surge of the RISC index – which tracks 27 publicly listed companies with underwriting subsidiaries at Lloyd’s – highlights an accelerating investor appetite for specialty re/insurance as a diversifying asset class.
2025’s sector success was not without challenges, as it faced two distinct periods of volatility that tested investors: the Los Angeles wildfires early in the year, and the introduction of new US trade tariffs in April.
“This led to the sharpest drawdown over the year; however, this ‘tariff shock’ passed notably swiftly, with the index reclaiming all its losses within four weeks,” said analysts.
Noting: “A relatively benign Atlantic hurricane season provided a tailwind for underwriting margins, allowing the index to climb a further 5 % in December. Throughout the year, the index maintained a consistent dividend yield of 2.13%, suggesting that the index price increases are being backed up by earnings growth, and are not as susceptible to bubbles as, for example, technology stocks.”
The RISX index ended 2025 at 9,405 points, capping a resilient year for specialty re/insurers despite a backdrop of geopolitical volatility, growing trade barriers and another year with catastrophe losses in excess of $100 billion.
The index’s performance serves as an indicator for the official Lloyd’s of London annual results. With the market reporting a 20.7% return on capital at the 2025 half-year mark, OCMR forecast that the full-year will remain at around 20%, comfortably exceeding the market’s cost of capital.
As 2026 begins, analysts point toward a potential transition. January renewals indicate a softening of rates, particularly on loss-free catastrophe business, coinciding with a 9% growth in dedicated reinsurance capital and cat losses sitting 18% below recent averages.
“Coupling this with falling interest rates may result in tighter margins, however the underlying demand for specialty coverage remains very robust,” analysts added.
Concluding: “With the current geopolitical and climate landscape increasing the need for sophisticated risk transfer, the constituents of the RISX index continue to enjoy the opportunity to narrow the global insurance gap and address emerging risks.”
