Reinsurance capital expected to rise 8% through 2025: Gallagher Re

Reinsurers will also maintain strong profitability this year.

The global reinsurance dedicated capital reached $805b at half-year 2025, up 4.8% from the restated full-year 2024 base. The increase was driven by both INDEX companies and non-life alternative capital, according to Gallagher Re’s latest Reinsurance Market Report.

Analysis of 16 reinsurers revealed reported and underlying combined ratios of 87.5% and 94.7%, compared with 84.6% and 94.2% a year earlier. 

Reported return on equity (ROE) stood at 17.7%, down from 19.6% in the first half of 2024. 

Underlying ROE fell to 12.6% from 15.2%, partly due to one-off factors unrelated to underwriting or investment income.

Gallagher Re expects reinsurers to maintain strong profitability in 2025, projecting an underlying ROE of 13% to 14% and a headline ROE of 17% to 18% for the full year, assuming normal catastrophe losses. 

Traditional reinsurance capital is also expected to grow by around 8% in 2025, supported by strong earnings and significant capital buffers.