Howden’s global reinsurance, capital markets, and strategic advisory arm, Howden Re, has noted a continued moderation in property-catastrophe reinsurance pricing at 1 June 2025, while underwriting rigour reportedly persisted, especially in structurally challenged layers.

According to a new report from Howden Re, following a selective return of capacity driven by historic pricing strength, reinsurers modestly expanded their appetite at the June 1 renewals, prioritising core relationships while maintaining underwriting discipline in a nuanced pricing environment.

“Risk-adjusted rate-on-line changes ranged from flat to down 20%, depending on loss experience and attachment point. Despite pricing pressures, programmes generally attracted subscriptions above 100%, enabling cedents to negotiate against the stringent terms and conditions that defined mid-year placements in recent years,” the firm explained.

Kyle Menendez, Managing Director, Howden Re, North America, commented, “The dynamic this year was neither a continuation of 2023’s dislocation nor a broad softening.

“Rate levels remain historically high but are now outpacing loss trends in many areas – This is drawing more interest from markets, including Lloyd’s syndicates with previously cautious balance sheets looking to grow incrementally.”

Howden Re’s report also suggested that the property-catastrophe XoL reinsurance market continues to recalibrate following several years of dislocation.

“Capital inflows have rebounded, with newly formed reinsurers and syndicates deploying meaningful capacity into mid-year placements. As such, expanding supply continues to outpace rising demand, underpinned by improved reinsurer retained earnings and sustained catastrophe bond activity, including the issuance of new and upsized transactions at the upper layers of reinsurance programmes,” the firm said.

Brian McKeon, Managing Director, Howden Re, added, “Reinsurers are being deliberate. We’re seeing evidence of measured growth, especially from those carriers that had stepped back in recent years.

“More reinsurers support full programme structures, especially where multiple property products are purchased at the same inception date, in the hope of influencing catastrophe occurrence signings.”

Howden Re’s June renewal report also highlighted growing confidence among reinsurers operating in Florida, supported by the resilience of recent legal reforms.

The firm said that key changes, such as restrictions on Assignment of Benefits (AoB) and broader litigation reforms, have largely remained intact, with legislative efforts to reverse them proving unsuccessful.

As per Howden Re, this legal stability has helped sustain a measured but ongoing appetite for Florida risk.

Howden Re’s report went on, “Despite price softening, demand growth has absorbed new capacity. A significant additional limit was sought by buyers amid Citizens’ continued depopulation and the launch of several new domestic carriers.

“A 20% increase in retention levels from the Florida Hurricane Catastrophe Fund (FHCF), projected at $11.3bn for 2025, drove cedants to seek private market solutions for lower layers. However, pressure on rates at these levels was largely mitigated by increased appetite from traditional reinsurers who now view them as attractive after years of caution.”

David Flandro, Head of Industry Analysis and Strategic Advisory, Howden Re, stated, “Capital is now more abundant and increasingly diverse, yet it’s being deployed with discipline, especially below the FHCF where pricing remains firm – At the top of towers, ILS are providing flexibility and competitive tension, marking a shift from crisis to calibration. This is a function of a stabilising market.”

Howden Re’s report concluded, “The 1 June 2025 renewal reflects a market transitioning from disruption to disciplined recalibration. Whilst rate moderation continued, underwriting rigour persisted, especially in structurally challenged layers.

“A stabilising legal and regulatory framework in Florida, combined with increased FHCF retention levels, has helped to support this evolution. The result is a more balanced reinsurance environment characterised by selective engagement, structural discipline and capital re-deployment aligned with long-term returns.”

In related news, KBW, an investment bank focused on insurance and reinsurance markets, recently provided a detailed outlook on the June 1 reinsurance renewals, along with projections for the January 1, 2026, renewal season.

According to KBW’s recent discussions with top industry executives during their Bermuda tour, property catastrophe excess-of-loss reinsurance rates are expected to decline by about 10% at the June renewals, marking a shift toward a softer market compared to recent years of firm pricing.

Meanwhile, Randy Fuller, Managing Director, Guy Carpenter, the reinsurance broking arm of Marsh McLennan, has suggested the California wildfires in Q1 are not expected to have a meaningful impact on reinsurer appetites or growth plans at the upcoming June renewals.

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