A Morningstar DBRS commentary, released Aug. 26, says selected top global property and casualty (P&C) reinsurance companies posted aggregated net income of US$12.0 billion in the first half of the 2025, compared to US$12.5 billion earned in the first half of 2024.
Underwriting profitability “remains solid with an average combined ratio of 87.6%, an increase from 83.7% in the previous year owing to significant natural catastrophe losses driven by California wildfires and severe thunderstorms storms in the U.S.,” adds Morningstar in the commentary.
Investment income
The ratings agency points out that reinsurers’ earnings have been supported by “solid investment income.” Morningstar adds that in the future, “reinsurers' performance may become more differentiated and dependent on their pricing discipline and risk selection.”
Reinsurers' overall P&C underwriting revenues in the first half of the year “reflected a slower growth environment as a result of rate softening,” underlines Morningstar, adding that “property catastrophe risk market pricing appears at an adequate level, with lower rates overall but increased rates in the loss-affected areas, such as Florida and California.”
Climate risk
As natural catastrophe insured losses continue to trend upward, Morningstar calls climate risk “the most significant risk for global reinsurers.”
However, Morningstar’s outlook for the P&C reinsurance market remains stable. “The upward trending natural catastrophe losses could potentially cause large losses for reinsurers but are currently effectively managed by stricter terms and conditions, adequate pricing, and ample capital.”
