The forces reshaping insurance in 2025 are intensifying. Capital is abundant, with global reinsurance capacity estimated at a record USD 720 billion and 1H seeing an all-time high of USD 17 billion in catastrophe bond issuance, Aon says in its recent report “Relevance Through the Market Cycle: Five Strategic Imperatives for Insurers”.

According to the report, this signals growing investor demand for non-correlated returns, but it also sharpens competition, squeezes pricing power and raises the stakes for differentiation.

Meanwhile, geopolitical pressures — from protectionism and civil unrest to persistent inflation — are complicating underwriting assumptions and dragging volatility into claims environments. Interest rates remain flat across major markets, leaving little room for investment yield strategies to paper over underwriting shortfalls.

Aon’s global analysis of 120 insurers from 2013 to 2024 confirms a clear pattern: Strategic focus and relevance consistently drive stronger financial outcomes — regardless of market conditions. The research shows that:

• The gap in profitability of high and low performers is consistent through the cycle.
• High performers sustain growth and underwriting profits even as rating indexes decrease.
• Customers and distribution partners reward re/insurers that have stayed constant through the cycle with higher growth when rates turn and increase.
• Insurers in the bottom quartile grow faster than the market during the soft phase of the cycle to the notable detriment of underwriting profits.

Key findings of the study include:

• In 2024, the cumulative composite of 120 insurers delivered a 14.7% return on average equity (RoAE), a 6 percentage point improvement on the prior 10-year (2013 – 2023) average of 8.7%. The combined operating ratio (COR) of 93.6% was the lowest during this decade and a 3.4 percentage point improvement on the 10-year average.
• Premiums grew 7.5% to USD 1.9T in 2024 and exceeded the 2013-2023 CAGR of 6.4% (excluding the impact of foreign exchange currency fluctuations) — even though this was the third year of deceleration in growth rate from the high of 10.2% in 2021.
• There is high variance in RoAE for different property and casualty segments. For the third consecutive year, the segments with the lowest CORs have the most globally diversified portfolios in both insurance and reinsurance and the most specialized (Lloyd’s/Bermuda specialists, specialty primary insurers).

Aon’s report “Relevance Through the Market Cycle: Five Strategic Imperatives for Insurers” builds on its former analyses of the seven key characteristics of top-performing insurers across risk appetites:

• Speed and agility;
• Data and analytics;
• Underwriting;
• Talent;
• Distribution;
• Capital.

“In a market defined by volatility, insurers must embed strategic relevance into every decision to outperform through the cycle. We are collaborating with clients on strategies to become top performing insurers to smooth volatility in financial results, become more relevant to customers and make their firms a more attractive proposition to investors”, said Paul Campbell, global growth leader in the Strategy and Technology Group for Aon.

“Insurers must pivot from product suppliers to performance partners which means being proactive, insightful and deeply attuned to client needs across geographies and sectors. However, legacy operating models, rigid capital structures and siloed distribution strategies are holding some insurers back. This is why Aon’s Strategy and Technology Group has built its data-driven approach and nurtured its talent to create and execute clients plans for resilience and growth”, commented Sherif Zakhary, CEO of Strategy and Technology Group and Inpoint for Aon.

The full report can be found here.