International casualty competition builds as US caution remains: Aon

International casualty competition is building faster than in the US, where returning capacity remains disciplined amid persistent liability pressures, Aon’s casualty leaders say.

Key points:
Lower loss development attracts capacity
New carriers add to international supply
Tort reform remains state-specific

International casualty buyers are heading into 1/1 in a stronger position as new carriers enter the market and existing reinsurers move into growth mode, increasing competition for business.

US casualty is encountering a similar dynamic; however, the capital is more cautious. Capital is returning, but persistent social inflation, nuclear verdicts and an improved but uneven tort-reform landscape are keeping reinsurers cautious about how they deploy it.

“Competition is broadening across international casualty, with reinsurers pursuing a wider range of growth and portfolio objectives,” Alexandra Chittock, head of international casualty product strategy at Aon’s Reinsurance Solutions, told Monte Carlo Today.

“International casualty has benefited from favourable loss development, portfolio repositioning and attractive diversification characteristics at a time when reinsurers remain focused on liability uncertainty elsewhere in the market.”

Chittock traced the shift in reinsurance conditions to mid-2025 and expects buyers to remain in a stronger position at 1/1. “Capacity is coming from both new entrants and existing markets looking to grow, giving buyers access to a broader range of potential partners. There’s a lot of supply versus the traditional demand.”

US casualty has experienced a slow but steady return of capital. Nick Nudo, senior managing director and US head of casualty at Aon’s Reinsurance Solutions, said this return of supply has resulted in a stable to slightly improved market for buyers over the past 12 to 18 months and includes both traditional reinsurance capacity and non-traditional in the form of ILS.  

“Different reinsurers are pursuing different portfolio objectives, creating competition across a broader range of business.” – Alexandra Chittock

Years of compounded primary rate increases, tighter terms and portfolio re-underwriting have improved the underlying business, attracting more capacity to the US market. Some reinsurers are also turning towards long-tail classes as conditions soften in property catastrophe, while others want to support casualty as part of broader relationships with important clients, he explained.

“I think there is a sizeable segment of reinsurers and capital providers that have come back to the US casualty market because they see it as a profitable space,” Nudo said. “There’s a great deal of capital returning to the market.”

Capital returns, caution remains

So far, however, that capital influx has produced only moderate improvements to reinsurance terms as reinsurers are still cognizant of the US legal environment. Florida, Georgia and Louisiana have introduced reforms, while New York is considering changes, but Nudo said these remained state initiatives.

“Insurers and reinsurers welcome these reforms.  But it’s not federal reform. It’s still very state-specific, and capital providers want to see the reform proved out”

The difficult tort environment constrains capacity and reinforces pricing and underwriting discipline, furthering a firm US casualty market.

“Capacity has returned to the US market, but [reinsurers] are conservative in their capital deployment.” – Nick Nudo

“The US legal environment is clearly not in insurers or reinsurers favour.” Nudo said. “This dynamic rewards insurers and reinsurers being conservative with their capacity and making sure the terms are right. This environment also keeps buyer demand for casualty reinsurance high.”

He nevertheless expects US casualty to remain profitable, despite reports that rates in some pockets are not keeping pace with loss trends.

Nudo said Aon’s analysis of underlying business within our reinsurance placements show improved profitability at each renewal in aggregate, which he regarded as evidence that the industry at large is moving in the right direction. Reinsurers were responding by expanding capacity especially with the most profitable cedants as opposed to a market-based approach.

“Reinsurers are recognising underlying improvements and beginning to expand in this space with those they want to do business with,” he said.

“There’s a lot more competition in the market, but most actors are still pretty responsible and conservative in their capital deployment.” 

Portfolio balance drives appetite

The same selectivity applies internationally. Greater capacity does not mean reinsurers will compete equally for every casualty portfolio. Their appetite depends on whether new business fills a gap in their existing book or adds to a concentration, Chittock noted.

“Reinsurers generally don’t want to take on additional casualty for the sake of casualty,” Chittock said. “They are looking at their portfolio attributes, the risk they’re missing in certain pockets and how to partner with cedants that can outperform across the cycle.”

For reinsurers, that assessment includes where claims could be brought, not simply where the policy was written.

“Some of the most attractive international casualty portfolios are not those that avoid US exposure entirely, but those that have developed a proven strategy for writing it selectively and managing it effectively through the cycle.”

Alexandra Chittock is the head of international casualty product strategy at Aon’s Reinsurance Solutions, and can be reached at: alexandra.chittock@aon.com

Nick Nudo is the senior managing director and US head of casualty at Aon’s Reinsurance Solutions, and can be reached at: nick.nudo@aon.com

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