Clear evidence re/insurance industry is still cyclical: W. R. Berkley CEO

Re/insurance market dynamics through the third quarter shows that the industry is still cyclical, and while there’s still margin in the property catastrophe reinsurance business, it is eroding and is no longer as attractive as it was in recent times, with further softening expected, according to Rob Berkley, Chief Executive Officer (CEO) of W. R. Berkley Corporation.

Speaking to analysts after the release of a solid set of results for the third quarter of 2025, W. R. Berkley’s CEO made some observations regarding the re/insurance market cycle and softening in the property cat segment.

“I think the past 90 days is just a continuation of clear evidence that the insurance industry is still a cyclical industry. And, for whatever the reason may be, some would say, fear and greed, the industry continues to seemingly make an art out of self-sabotage when it comes to its own success,” he said.

“The reinsurance marketplace, clearly the property market, particularly property cat, that bloom is off the rose,” Berkley commented on the reinsurance sector specifically. “From our perspective, there’s still margin in the business. We’ll see how long that lasts. It’s without a doubt eroding.”

The CEO went on to say that you can “feel the growing groundswell”, noting that it’s “palpable” around the January 1st renewals and the appetite that’s expected to come from the reinsurance market as competition intensifies.

Later in the call, Berkley was pressed on the points he made around the property reinsurance space, and whether rate adequacy could really start to turn at 1.1.

“I think it depends on what the feeding frenzy is like at 1.1,” he said. “Everyone needs to assess how much margin they think is in the business. Obviously, rates went up dramatically. Attachment points shifted significantly, so on and so forth. While, nine months ago, we saw a softening, and I think the expectation is given the performance, it’s likely there’ll be further softening at 1.1 for this coming year. We’ll have to see how aggressive the market is. We have a view as to how much margin is in the business and where and at what point we shift our posture from an offensive one to a defensive one. That’s just the reality of a cyclical business.”

Reinsurance broker Guy Carpenter’s global property catastrophe rate-on-line index revealed a decline in rates after the April and mid-year 2025 renewals, which followed a 6.6% decline after the January 2025 renewals, highlighting the softening trend from the highs of 2023.

Although, at that time, this index of global property cat reinsurance pricing was still more than 50% higher than its last low in 2017, and pricing was still higher than all years from 2006 to 2023, pointing to declining yet still attractive pricing in property cat reinsurance.

Clearly, though, it is a shifting landscape and the expectation from Berkley’s CEO and much of the market, absent a significant event or series of cat events in the final months of the year, is that property cat rates will soften further heading into 2026.

But as noted by Berkley, the firm does still see margin in the business, and only time will tell if there’s still sufficient margin come 1.1 and further into 2026, or whether carriers will pull back from the space and pivot to potentially more profitable areas.

Beyond property and looking at the casualty reinsurance space, Berkley reiterated previous comments that the company has been somewhat frustrated with the reinsurance sector.

“It would seem as though reinsurers are dissatisfied with the underlying rate increases that their cedants are achieving. From our perspective, we think that there should be opportunity to push a little harder. That having been said, obviously, it inures to our benefit as a buyer of reinsurance,” he said.