reinsurance

The catastrophe bond market has shown increasing confidence in assuming wildfire risk even after the major disaster that struck the Los Angeles region of California at the start of this year, with already over $3.375 billion of cat bonds issued in 2025 that have an exposure to the wildfire peril.

A quieter July in catastrophe loss terms resulted in US insurer Allstate only reporting $184 million in pre-tax impacts from severe weather events, which has lifted the total for the current annual aggregate risk period for its catastrophe bonds to $2.174 billion so far.

As the reinsurance market begins to look towards the end of year renewals and negotiations leading up to that, Mike van der Straaten, the CEO of Antares Global, has highlighted that while the property retrocession market is “buyer-favourable” at this time, capacity remains somewhat constrained.

According to equity analysts from Berenberg, alternative capital and insurance-linked securities instruments have become an increasingly important component of property catastrophe reinsurance limit, notably in the United States as cedants see value in diversified sourced capital.

Cedar Trace, the Bermuda-based insurance, reinsurance, and asset management group formerly operating under the Mereo brand, has made another senior appointment to its insurance-linked securities (ILS) platform, hiring Patrick Witteveen as Head of Business Development.

Hannover Re, the global reinsurer, is establishing a Bermuda based insurance-linked securities (ILS) platform named Hannover Re Capital Partners, as it looks to round-out its offering to ILS investors and the market, while creating a new avenue to manage and deploy third-party capital to augment its business activities, we understand.

Were the 1926 Great Miami hurricane to occur again today, analysis from catastrophe risk modelling specialists Karen Clark & Company (KCC) suggests that more than $5 trillion in insured property value would be affected by hurricane force winds, driving well over $200 billion in insurance and reinsurance market losses.

The catastrophe bond asset class, while growing strongly, is not seen as putting pricing pressure on reinsurers, with the main additional competition seen as coming from the traditional reinsurance market whose capital base has grown faster, analysts at J.P. Morgan have said.

The reinsurance sector has rebounded since 2023 with stronger pricing and disciplined underwriting, helping companies generate solid profits and grow capital. As of mid-2025, the market remains stable, though there are early signs of modest softening at the highest layers of property reinsurance, according to AM Best.

A study undertaken by The Insurance Federation of Egypt has highlighted how the use of catastrophe bonds can help protect the country’s economy and society from natural catastrophe events, while also opening new opportunities for its insurance market.