Reinsurance capital hits $760b as conflict risks test industry buffers

11 reinsurers produced $31b net income in 2025 up 16% from the prior year.

Global reinsurers are well-positioned to handle the financial volatility caused by the escalating conflict in the Middle East. 

According to a report from S&P Global Ratings, the sector entered 2026 with excellent capitalisation and a stable outlook. 

Heightened political risks are expected to persist regardless of the conflict's duration.

The industry's stability is supported by record-high capital levels, S&P said. Global reinsurance capital reached $760b as of 30 September, 2025. 

For the top 19 reinsurers, capital redundancy—the extra cushion held above required levels—was 11% at the highest stress scenario at the end of 2024. 

Preliminary data for 2025 shows even further strengthening, with 11 reporting reinsurers generating $31b in net income, a 16% increase over the previous year.

This financial strength is expected to act as a buffer against potential losses stemming from the region.

Whilst direct asset exposure to the Middle East is limited for most of the top 19 rated reinsurers, the conflict is expected to impact the liability side of their balance sheets. 

Claims are most likely to arise in speciality lines.

International airports have closed, and maritime activity is severely affected, including potential disruptions at the Strait of Hormuz.

The destruction reported in several countries, including Iran and Israel, directly affects these niche classes.