Published on
08 September 2025
Beyond the headlines
As we gather in Monte Carlo this year, it is worth pausing to reflect on how our market is often described through a handful of soundbites — “ample capacity is driving greater competition” or “renewal focus this year is on - pick one - [price/coverage/capacity]”. These macro statements make for easy headlines but fail to capture the sophistication of our industry and the complexity of today’s market and risk environment.
A nuanced market landscape
What is true for rate adequacy in one geography or line of business may not be true in another. Dynamics in property catastrophe cannot simply be transferred to other classes of business and casualty dynamics diverge sharply by market with fundamental differences within the underlying casualty sub-products. A single narrative does not do justice to these variations, nor does it help our clients navigate their own unique challenges.
While the reinsurance market capital levels are robust, that capital is neither unconditional nor indiscriminate. Investors and shareholders expect returns above the cost of capital, and the industry carries vivid memories of the years when those returns were not delivered. The wholesale reset we saw in 2023 was necessary to correct an unsustainable trajectory. The task now is to bring a granular and nuanced approach to portfolio management, recognising the different adequacy positions of each line and territory, analysing the unique risk headwinds for each and supporting our clients in navigating these for their own specific portfolios, finding a trading position that is stable and sustainable over the long term.
The role of discipline
This requires the market to continue to be disciplined. The discipline to ensure that underwriting decisions reflect the true cost of risk, that data is improving, and that terms and conditions are aligned with exposures. The discipline to assess the direct and secondary impacts of an ever growing list of evolving risks, from tariffs to climate, geopolitics to litigation system abuse. Discipline at the reinsurance level cascades down through the system. It encourages the primary market to sharpen its underwriting, promotes better risk assessment, and ultimately supports risk mitigation at source. That is good for all stakeholders.
Partnership for the long term
A nuanced and disciplined approach built on deep risk expertise supports long-term partnership. A sustainable market is not built on transactional conversations about price alone. As reinsurers, our role goes beyond providing capacity, but to bring specialist expertise, to challenge assumptions constructively, and to stand alongside clients as they navigate uncertainty. When we do this well, the value we deliver goes far beyond a rate-on-line index. We create long-term, mutually beneficial relationships.
At LM Re, our extensive experience across a diverse product offering and global presence enable us to guide partners through a range of challenges.
Looking ahead
The resilience of our market will come from our ability to combine discipline with partnership. That is the foundation on which lasting value can be created and the current market environment of capital strength provides the perfect backdrop for it.
