According to Insurance Capital Markets Research (ICMR), the global specialty reinsurance industry ushered in a glorious final year in 2025. Despite geopolitical fluctuations, increasing trade barriers and huge catastrophe losses, the RISX Net Total Return Index still achieved a total return of 22.3%.
This performance not only cemented the index’s reputation as a robust indicator of London’s Lloyd’s Market, but also significantly outperformed the broader global equity benchmark.
The 22.3% return outperformed major indexes, including the MSCI World, which returned 21.3%, and the S&P 500, which lagged further behind at 17.7%.
The surge in the RISC index, which tracks 27 listed companies with underwriting subsidiaries at Lloyd’s, highlights growing investor interest in specialty reinsurance/insurance as a diversified asset class.
The industry’s success in 2025 will not be without its challenges, as it faced two distinct periods of volatility that tested investors: the Los Angeles wildfires at the beginning of the year and new U.S. trade tariffs in April.
“This resulted in the sharpest decline of the year; however, this ‘tariff shock’ soon passed, with the index recouping all losses within four weeks,” analysts said.
Pointed out: “A relatively mild Atlantic hurricane season provided a boost to underwriting profits, allowing the index to climb a further 5% in December. The index’s dividend yield remained stable at 2.13% for the year, suggesting that the index’s price gains are supported by earnings growth and are not as susceptible to bubbles as technology stocks.”
Despite geopolitical volatility, rising trade barriers and more than $100 billion in catastrophe losses, the RISX Index closed 2025 at 9,405 points, capping a resilient year for specialty reinsurers.
The index’s performance is an indicator of Lloyd’s of London’s official annual results. The market reports that the return on capital for the first half of 2025 is 20.7%, and OCMR predicts that it will remain around 20% for the full year, easily exceeding the market’s cost of capital.
As 2026 begins, analysts point to a possible shift. January renewals showed some softening in rates, particularly in no-loss catastrophe business, while dedicated reinsurance capital grew 9% and catastrophe losses were 18% below the recent average.
“Coupled with falling interest rates, which could result in tighter margins, underlying demand for specialty insurance remains very strong,” the analysts added.
The conclusion: “With the current geopolitical and climate landscape increasing demand for complex risk transfers, RISX Index constituents continue to enjoy opportunities to close the global insurance gap and address emerging risks.”
