Global dedicated reinsurance capital is projected to climb to an unprecedented $649 billion in 2025, according to estimates from AM Best and Guy Carpenter.
As readers will see from the image below, the anticipated 2025 figure would surpass the previous peak of $607 billion recorded in 2024 and mark a sharp rebound from the pandemic-era volatility seen in 2020–2022.
Traditional reinsurance capital is expected to account for the bulk of the total estimated figure at $535 billion, continuing its long-standing dominance of the market.
However, third-party capital is also forecast to grow, reaching $114 billion, which is its highest level yet.
This will come as no surprise to readers of our sister publication Artemis, which has consistently reported on investors’ sustained appetite for insurance-linked securities and other alternative vehicles, even in the face of recent catastrophe losses.
The data from AM Best and Guy Carpenter has highlighted a structural shift in market composition over the past decade.
In 2012, third-party capital accounted for just $38 billion of the total $330 billion, while traditional capital stood at $292 billion.
Since then, alternative capital has tripled in size, while traditional capacity has grown more gradually.
The figures above come from AM Best’s Market Segment Report, “Reinsurers’ Disciplined Capital Deployment and Underwriting Remain Key Foundations,” which highlighted a significant market recalibration beginning in early 2023.
We recently reported that, as the global reinsurance market moves into a period of sustained profitability and stability, disciplined capital deployment and robust underwriting remain essential.
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