Milli Re 2025 Annual Report

Global Reinsurance Market and Milli Re in 2025 achieve greater alignment and standardization of terms and conditions across their reinsurance panels. The January 2026 retrocession renewals were characterized by continued demand growth, abundant capacity and increasing market competition. Retained earnings generated by the strong performance of reinsurers and the ILS market in recent years were redeployed into the market, while additional inflows from a limited number of new entrants also contributed to excess supply. Despite the increase in demand, abundant capacity intensified market competition and exerted downward pressure on pricing. In addition to portfolio growth, buyers’ objectives to reduce total liabilities retained in their net, together with changes in capital models in line with updates to catastrophe models, stood out as the key drivers of heightened demand. On the other hand, limited losses to the retrocession market from the California wildfires, the costliest natural catastrophe of the year, bolstered retrocessionaires’ appetite, enabling them to maintain their buyers. Although reinsurance demand increased moderately as ongoing inflationary environment continued to put pressure on sums insured, the significant uptick in overall reinsurance supply translated into meaningful price reductions. On a risk-adjusted basis, global property catastrophe rates on-line decreased by approximately 15% on average. Despite the prevailing softening, rates continue to remain well above the lows observed in 2018. Similar to previous years, differentiation remained to be a key driver and reinsurers assessed programmes individually based on factors such as coverage, geographical scope, loss history and adequacy of technical pricing. While cedants sought to benefit from more favourable terms, it was also noteworthy that the firm order terms were released with delays beyond the usual timeline. On the other hand, as buyers prioritized cost optimization, negotiations were mainly shaped around pricing and programme structures. Taking advantage of the favorable market conditions, buyers were able to generate meaningful cost savings, secure additional protection and allocated capacity levels. Compared with previous years, delays were also observed in the renewal timeline, with firm order terms for most programmes being issued in the second half of December. Showing great variation depending on programme performance, scope of cover and loss (Cat XL) experience, risk-adjusted prices for catastrophe excess of loss retrocession programmes declined by 10% to 20%; while the most significant price reductions were observed at the upper layers, where competition remains high. Europe Low loss frequency, together with increased global capital supply supported a more stable and orderly January 2026 renewals for the European reinsurance market. Amid intensifying competition, incumbent reinsurers utilized retained earnings and increased their allocated capacity, in an effort to defend their market share. As a result, available capacity continued to outpace demand across the market. While changes in terms and conditions The January 2026 retrocession renewals presented ongoing demand increase. 70 MİLLİ RE 2025 Annual Report