Some 76% of reinsurers will achieve double-digit capital growth in 2025, according to Gallagher Re’s 2025 Reinsurance Market Report, underscoring another strong year of balance sheet expansion for the industry.
According to previous reports, Gallagher Re predicts that global reinsurance dedicated capital will reach a record US$648 billion in 2025, an increase of 11% from 2024.
The figure marked the second-highest annual growth rate in the past decade.
“Using revenue growth as a proxy for reinsurance demand, capital supply growth will be significantly ahead of capital demand growth in 2025, and this imbalance will continue into 2026,” the broker explained.
Traditional reinsurance capital remains the main driver of overall expansion, accounting for approximately 68% of total capital growth. The segment grew 10% year-over-year to $513 billion.
Meanwhile, non-life alternative capital continued to accelerate, rising 18% to $135 billion, driven by strong net inflows.
Gallagher Re noted that this was Alternative Capital’s strongest annual growth rate since it began tracking the market.
The report also highlights the breadth of capital growth across the industry, with 76% of reinsurers achieving double-digit growth during the year.
Gallagher Re added that foreign exchange movements provide a significant boost to capital growth for non-US dollar reporting reinsurers as local currencies strengthen against the US dollar in 2025.
“For example, EuroCorrespondent’s U.S. dollar base capital increase was supported by FX at around 13%. Of the big four European reinsurers, Swiss Re (which reports on a U.S. dollar basis) had the strongest local currency base growth at 13%, followed by Hannover Re (5%), Munich Re (5%) and SCOR (-1%),” said Gallagher Re.
The brokerage further pointed out that since the end of 2022, traditional reinsurance capital has grown by nearly 50% cumulatively.
The firm concluded: “Bermuda reinsurers had the highest cumulative growth rate at 73%. Capital growth among the top four European reinsurers was relatively modest at 34%. The lower capital growth rates among the top four European reinsurers reflected a more consistent capital return policy and relatively higher payouts than most companies.”
In related news, Andrew Johnston, author of Gallagher Re’s quarterly insurtech report series and the broker’s global head of insurtech, recently discussed how investment trends, artificial intelligence and emerging liability risks are reshaping the insurance and reinsurance markets in an interview with Reinsurance News.
