Global Reinsurance Market Sees Strong Profitability and Growing Capitalization

The global reinsurance market in 2024 is marked by robust profitability and increasing capitalization, according to Guy Carpenter. This trend is projected to extend into 2025, with capital positions continuing to strengthen.

Guy Carpenter, in collaboration with A.M. Best, forecasts a 9 percent rise in dedicated reinsurance capital, bringing the total to $620 billion by 2024. Catastrophe bonds have also experienced significant growth, with a record-setting first half of the year. As of June 30, 51 catastrophe bonds entered the 144A market, placing approximately $12.2 billion in limits and raising the total outstanding notional amount to more than $45.2 billion.

"The market has ample capacity, and reinsurers are motivated to engage with cedents," said Dean Klisura, president and CEO of Guy Carpenter. "Our clients are seeking to differentiate themselves and leverage key strategic trading relationships."

At a virtual media briefing, Guy Carpenter's executives discussed the reinsurance market outlook for the January 1, 2025, renewals. David Priebe, chairman of Guy Carpenter, highlighted that risk appetites have been improving throughout the first half of 2024, with underwriting discipline still in place. He noted, "This current trading cycle is marked by engaged stakeholders actively coming to the table to provide critical capital and financial support to the economy."

Discussing the property and casualty reinsurance market, the company's leaders pointed to a more orderly trading environment in 2024, following a significant reset in property pricing and coverage in 2023. This trend is expected to continue into 2025, assuming no major natural catastrophe events occur for the rest of the year. Casualty renewals will remain focused on underlying rate environments and portfolio performance, with adequate capacity but ongoing scrutiny across sublines.

For more information and a full recap of Guy Carpenter's virtual media briefing, visit its Renewal Resource Center.