Global Reinsurance Dedicated Capital Climbed to $769 Billion in 2024

Global reinsurance dedicated capital reached $769 billion in 2024, a 5.4 percent increase from the 2023 level, according to Gallagher Re.

In its 2024 Reinsurance Market Report, Gallagher Re found the combined ratio of a subset of 16 reinsurers improved to 86.8 percent in 2024 from 87.3 percent a year earlier.

"The global reinsurance industry's capital position remains strong on an economic basis, which Gallagher Re views as the measure most relevant for management teams' decision-making," the report said.

Reinsurers' revenue growth remained strong in 2024 at 8.1 percent, Gallagher Re said, driven by higher rates or property and casualty reinsurance. "Exposure growth remained muted as companies looked to reduce their exposure to US casualty business," Gallagher Re said.

Reinsurers' return on equity (ROE) remained strong in 2024 at 17 percent, according to Gallagher Re, though that was down slightly from 19.5 percent in 2023. The report said Gallagher Re believes that reinsurers are well positioned to maintain strong profitability in 2025.

"The California wildfires have resulted in substantial insured losses early in the year, but even if these losses prove to be incremental to annual Nat Cat budgets, reinsurers are well placed to deliver headline and underlying ROEs which are roughly double the industry's cost of capital," the report said.

Given that strong profitability, traditional reinsurance capital is on pace to increase 6 percent this year, Gallagher Re said. "Resilience of the reinsurance industry materially improved over the past 3 years, driven by significantly improved underlying profitability," the report said.