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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
  • James Butler, Ph.D., Hamamatsu
  • Natalie Fardian-Melamed, Ph.D., Columbia University
  • Justin Sigley, Ph.D., AmeriCOM
  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
  • Professor Stephen Sweeney, University of Glasgow
  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

Best’s Market Segment Report: Momentum Remains for Dedicated Reinsurance Capital Beyond Market Peak

Total dedicated reinsurance capital is projected to grow to USD 649 billion in 2025, following similar-size increases as in the previous two years, according to a new AM Best report.

The Best’s Market Segment Report, “Momentum Remains for Dedicated Reinsurance Capital Beyond the Market Peak,” is part of AM Best’s look at the global reinsurance industry ahead of the Rendez-Vous de Septembre in Monte Carlo. Other reports, including AM Best’s ranking of top global reinsurance groups and in-depth looks at the insurance-linked securities, Lloyd’s, life/annuity, health and regional reinsurance markets, will be available during August and September.

According to this report, traditional reinsurance capital increased year over year by approximately USD 32 billion, or 7%, to USD 500 billion in 2024, supported by strong underwriting results, retained earnings and higher investment yields. While a wave of new startup reinsurers entering the market has not emerged, established reinsurers have strengthened their capital bases via secondary equity offerings, as well as through disciplined retention of earnings while a surge in investor appetite for catastrophe bonds has bolstered third party capital growth. Together, these sources of capital have enhanced the market’s overall financial resilience and its capacity for growth.

“Reinsurers continue to transition toward more diversified and balanced business models, including a growing allocation to primary and specialty insurance lines, reflecting a deliberate move away from purely relying on property catastrophe risk,” said Antonietta Iachetta, associate director, AM Best. “This structural shift supports earnings stability and more agile capital deployment, as well as the amount of capital deployed in the traditional reinsurance market, even with significant catastrophic activity.”

Third-party reinsurance capital saw a 7% increase in 2024 to USD 107 billion, according to the report. AM Best works in conjunction with Guy Carpenter to estimate the total amount of capital supporting the reinsurance industry. AM Best estimates traditional reinsurance capital; Guy Carpenter estimates third-party capital. The third-party reinsurance capital estimate for 2025 is estimated at USD 114 billion, driven predominantly by record-setting growth in catastrophe bond issuance.

“Assuming a more normal level of catastrophic events, reinsurers are on pace to report upper-single-digit capital growth in 2025,” said Dan Hofmeister, associate director, AM Best. “Volatility in asset risk and potentially higher reserve charges from continued social inflation could create some negative pressure, but reinsurers are well-positioned to absorb a normal level of volatility in the market.”

To access the full copy of this market segment report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=356894.

For global reinsurance reports ahead of Rendez-Vous de Septembre, as well as video coverage of the event, please visit AM Best’s Reinsurance Information center.

Lastly, AM Best will host its annual reinsurance market briefing at Rendez-Vous de Septembre on Sept. 7, 2025, at 10:15 a.m. (CEST) in Monte Carlo. For more information, please visit the event website.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2025 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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