A recent series of stress tests conducted by S&P Global Ratings on a number of different insurers and reinsurers, to see how they would withstand a 1-in-250-year catastrophe event has showcased the importance that both reinsurance and retrocession bring towards managing catastrophe risks.
“The insurance industry faces an escalating threat from extreme weather. Hurricane Ian in 2022, for example, caused about US$60 billion in damage, and last year’s California wildfires resulted in more than US$40 billion in claims. Such incidents are pushing insurers–and reinsurers–to reassess their risk exposure,” S&P said in a new report.
“Insured losses globally exceeded US$100 billion in 2025 for the sixth consecutive year. This dynamic does not appear to be going away–the industry is adjusting to a reality where extreme weather is increasingly common.”
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