According to S&P Global Ratings’ report titled Three Key Trends We’re Watching, global insurers are encountering varied challenges across key sectors through 2025. In the property and casualty (P/C) insurance market, rising losses from natural catastrophes are pushing companies to raise premiums and reduce coverage. This trend is especially pronounced in high-risk regions and regulated markets.
Reinsurers Pull Back, Primary Insurers Take More Risk
Reinsurance firms are retreating from lower-tier coverages, leaving primary insurers to assume more risk, particularly in personal insurance lines. To manage their exposure, reinsurers plan to increase the use of third-party capital. This includes instruments like catastrophe bonds and insurance-linked securities, which help spread risk during peak periods.
Growth in Cyber and Collateralized Reinsurance Supports Pricing
Investment of third-party capital is also growing in emerging areas such as cyber insurance and collateralized reinsurance. These developments are expected to sustain positive pricing momentum as insurers approach upcoming policy renewals.
Life Insurers Face Pressure Despite Strong Demand for Retirement Products
Life insurance providers continue to shift toward retirement-focused offerings, such as annuities. Although demand for these products remains strong, insurers face challenges from higher market risks and limited flexibility in repricing. These factors could restrict the potential for future credit rating upgrades.
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