Reinsurers weathered a volatile first half with solid performance despite higher than expected catastrophe losses, according to new data from Morningstar DBRS.
Reinsurers reported an aggregated net income of $12.0 billion in H1 2025, only slightly lower than the $12.5 billion earned in H1 2024. This is notable given that insured losses from the first half of this year have reached a record high.
Hedge funds have been an active participant in the reinsurance space over the years, both through ILS strategies and by launching their own hedge fund backed reinsurance companies. Property & casualty is the most popular reinsurance category. Morningstar says reinsurance activity in the P&C market has slowed this year, but could see a pick up in the back half of the year and into 2026. Notably, that growth could come in California and Florida, two markets that have a high propensity for disaster events. However, recent legislative reforms in Florida, for example, have made it more attractive to reinsurers.
Specialty reinsurance has also seen relatively consistent growth so far this year, Morningstar says. Overall market conditions remain generally favorable but there are some headwinds emerging. According to Morningstar DBRS' research note - "some softening is evident, especially in cyber risk, which has experienced an unprecedented capacity growth. While Reinsurers observed some increase in primary casualty rates, the high cedin......................