While reinsurance rates have been trending downward throughout 2025 as the market softens following a period of historic hardening conditions, pricing pressure is now expected to persist absent a severe hurricane season or other major loss, according to analysts at Morgan Stanley.In a recent report, analysts at Morgan Stanley observed that reinsurance pricing continued to soften during the mid-year renewals, with average reductions seen in the low single to low double digits.This trend has been driven by ample capital, resulting from robust 2024 returns.Furthermore, terms and conditions predominantly remained stable, though pricing exhibited a divide between loss-affected accounts and those that are clean.

Despite overall pressure, reinsurers continue to view property catastrophe as attractive, while casualty lines, especially excess casualty, are experiencing rate hikes that exceed loss trends, Morgan Stanley noted.As readers will recall, 2025 began with a particularly active first quarter, driven by two major wildfires in Los Angeles County in January, which lead to large catastrophe losses in the opening quarter.However, “The year started off with the California wildfires, leading to large CAT losses in 1Q25 results across reinsurers.

2Q25 CAT results were generally strong, with losses coming in below consensus expectations.With researchers calling for an above-normal Atlantic hurricane season for 2025, disciplined underwriting will be key heading forward,” Morgan Stanley explained.“In our view, this should help shield reinsurers from some impact, as they continue to hold strong on attachment points and terms & conditions, which are the main tools to exclude secondary and un-modelled perils,” the analysts added.

Morgan Stanley also affirmed that accounts impacted by losses over the previous year due to catastrophes like wildfires and hurricanes are experiencing price increases, which are mitigating some of the market’s observed weaknesses.“Absent an unusually large storm season, we expect pricing to continue facing pressure heading into Jan 1, 2026 renewals,” the analysts said.As a reminder, you can track the  on our dedicated page and we’ll update you as new information emerges..

All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.Our can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.