Global Reinsurance Market: 2024 Results and 2025 Outlook
Global reinsurers delivered strong results in 2024, recording continued capital growth driven by high levels of retained earnings. Both reported and underlying return on equity (ROE) remained well above cost of capital. This was driven by an improvement in the underlying combined ratio and growth in recurring investment income.
The industry is well positioned to deliver strong financial results in 2025, with further significant capital growth.
Gallagher Re’s 2024 Reinsurance Market Report provides a detailed analysis of the capital and profitability of the reinsurance industry, based on an index group of reinsurers. We have analysed the report and identified key highlights.
Reinsurance Market Capitalization
As of the end of 2024, total global reinsurance capital reached $769 billion, up 5.4% from the updated 2023 base. Growth was driven by both traditional reinsurers and alternative reinsurance capital in the non-life segment. The forecast for 2025 foresees an additional 6% growth in traditional reinsurance capital due to high profitability.
Reinsurers’ capital, which provides over 80% of market capital, increased by 5.3% to $629 billion. The main factor was a net increase in income of $117 billion, partially offset by a return of capital of $58 billion and unrealized investment losses of $23 billion, mainly due to National Indemnity.
Reinsurers’ capital growth dynamics
The level of economic capitalization remains stable: the average solvency ratio (or SST in the case of Swiss Re) of the top four European reinsurers in 2024 was 265%, which, although lower than the 273% in 2023, still exceeds the upper limit of these companies’ target ranges. At the same time, capital growth in 2024 outpaced the growth rate of premiums.
Reinsurers’ profitability and combined ratio
Among INDEX companies that disclose detailed data, revenues in 2024 increased by 8.1%, mainly due to higher rates in the property and liability reinsurance segment. At the same time, growth remained limited by the reduction in participation in the US liability market.
The combined ratio decreased by 0.5 pp. — to 86.8%, due to a reduction in non-catastrophe losses (-3.2 pp). This was partially offset by the impact of natural catastrophes (+0.6 pp), a decrease in the volume of reserve releases (+1.2 pp) and an increase in expenses (+0.7 pp).
Reinsurance industry combined loss ratio
The increase in reserves from previous years in 2024 reduced the combined ratio by 0.6 pp, mainly due to additional provisioning by Swiss Re ($2.6 billion). Excluding this, the release of reserves gave a 2.5% improvement in the ratio, which is 0.7 pp higher than in 2023.
In the underlying calculation, the combined ratio decreased from 96% in 2023 to 93.0% in 2024, the best result since the launch of reporting in 2014.
ROE and the impact of catastrophes on the reinsurance industry
In 2024, the underlying ROE in the reinsurance industry was 13.9%, remaining above the cost of capital. Companies reported an ROE of 17% (versus 19.5% in 2023). However, taking into account one-off losses (SCOR provisioning in L&H, Everest provisioning in P&C), the adjusted underlying ROE is estimated at around 15%.
The catastrophic loss burden remained below the norm at 7.6%, compared to an average of 9%.
Reinsurer ROE
Gallagher Re estimates that total insured catastrophe losses have increased from $123 billion in 2023 to $154 billion in 2024. The share of losses borne by the subgroup companies has decreased: 9.2% in 2022, 7.3% in 2023 and 6.9% in 2024, due to higher entry points and the nature of catastrophes.
2025 Reinsurance Outlook and Risk Assessment
If catastrophe levels and investment markets remain stable, reinsurers are expected to deliver an underlying ROE of 15% and a total ROE of 18-19%. These figures are approximately double the industry’s weighted average cost of capital.
In early 2025, there were significant events — wildfires in Southern California and Los Angeles, with preliminary estimates of insured losses of $35–40 billion.
Large reinsurers reported that this has already consumed 25–33% of their annual catastrophe budgets. If these losses are in addition to typical events, ROE could decline by 2–3 pp, but remain above the cost of capital.
Impact of natural disasters on reinsurers’ combined ratio
For the market as a whole, the impact of these fires is estimated to be more modest — a decrease in ROE of 1.3 pp. The industry remains financially strong, thanks to improved profitability over the past three years.
This provides the potential for another strong year, with traditional reinsurance capital forecast to grow by 6% in 2025, even with high capital returns.