Leading global reinsurers, have recorded 19.9% return on equity (ROE) for 1H2026, the second-highest half-year result recorded over the past decade.
The figures were reported by Gallagher Re’s Composite, a specialised tracking group that tracks the performance of leading global reinsurers. Gallagher Re also estimates that, by year-end, the Composite will have generated approximately $13bn of cumulative profits above the cost of equity across the 2017-2026 period, demonstrating the industry’s ability to create value across both hard and soft market conditions.
In a statement, the reinsurance broker noted that strong earnings were supported by healthy underlying profitability and materially lower-than-normal Nat CAT losses. Reflecting the stronger-than-expected performance in 1H2026, Gallagher Re has increased its FY2026 ROE forecast for the Composite to 16.5%-17.5%, up from its previous estimate of 14%-15%.
The revised outlook assumes normalised Nat CAT losses during the second half of 2026, as well as contributions from reserve releases and realised investment gains in line with long-term averages.
Growth in the reinsurance industry
Total reinsurance dedicated capital increased by 5% in 1H2026, to a record $688bn, driven by continued growth in both traditional and alternative capital. Traditional reinsurance capital increased 4%, while non-life alternative capital grew 9% over 1H2026.
“The first half of 2026 demonstrates that the reinsurance industry remains in a position of exceptional financial strength. Reported returns remain well above the cost of equity, capital continues to grow, and the sector has built substantial resilience against future volatility,” said Gallagher Re Global Strategic Advisory Head of International Michael van Wegen.
“However, the challenge facing the industry is increasingly becoming one of capital deployment rather than capital generation. Capital continues to grow faster than revenues, adding to an already significant supply and demand imbalance across many reinsurance markets.”
According to Gallagher Re’s 2026 HY Reinsurance Market Report, this growth occurred in the face of an increasingly competitive market environment.
The report also highlighted growing divergence in how reinsurers are responding to excess capital.
While many carriers have increased dividends and share buybacks, Gallagher Re noted that capital accumulation continues to outpace capital returns, particularly as alternative capital maintains strong momentum and expands into a broader range of business lines.
Despite this, Mr van Wegen remains optimistic, saying, “The industry’s financial position remains extremely robust.”
“Our analysis suggests the sector could absorb a $50-75bn insured loss event, in addition to normal second-half CAT activity, and still earn its cost of equity for 2026.”
Gallagher Re’s 2026 HY Reinsurance Market Report can be accessed here.