Global:2025 was record year of profitability and capital growth for global reinsurance

The global reinsurance industry experienced an exceptional year in 2025, achieving record profitability and capital growth, according to Gallagher Re's Full Year 2025 Reinsurance Market Report.

Total reinsurance dedicated capital reached a new high of $648bn, an 11% increase from 2024, marking the second-strongest year for capital growth in over a decade. This growth was driven by retained earnings in traditional reinsurance capital and historic inflows into non-life alternative capital.

Gallagher Re’s reinsurance composite, which tracks the performance of leading reinsurers, reported a 19.3% ROE for 2025, supported by strong underlying profitability and benign natural catastrophe losses. This represents one of the highest ROEs recorded since the inception of the Reinsurance Market Report.

“2025 was a landmark year for the reinsurance industry, with reinsurers achieving historic levels of profitability and capital growth,” said Gallagher Re Global Strategic Advisory Head of International Michael van Wegen.

Returns are expected to moderate, as Gallagher Re projects a 14-15% ROE for the composite in 2026, assuming normalized natural catastrophe losses and contributions from realized capital gains and reserve releases.

Traditional reinsurance capital growth is expected to slow to 4%. However, excess capital accumulation is likely to continue, presenting challenges for capital deployment in a softening market.

“While the reinsurance industry has enjoyed several years of exceptional returns, the dynamics of supply and demand have shifted in favor of buyers, as evidenced by rate softening during the January 1 and April 1 renewals,” said Mr van Wegen.

“Despite this, the industry remains resilient, with profitability expected to remain well above the cost of equity in 2026.”