Over the past decade, the volume of ceded US health insurance premium to the reinsurance market has grown more than 300%, to USD 203 billion in 2025 from USD 59 billion in 2016, a new AM Best report has revealed.
The Best’s Market Segment Report, “Reinsurance Solutions Becoming More Viable for Health Insurers,” is part of AM Best’s look at the global reinsurance industry ahead of the Rendez-Vous de September in Monte Carlo.
The report highlights an accelerating shift over recent years as health plans turn to reinsurers to navigate medical costs volatility, an expanding footprint in government-sponsored programs and heightened demands for capital efficiency.
Ceded premium growth has been in double digits in three of the past five years, including 2024 and 2025 when ceded premiums increased by 30% or more.
“Underwriting margins across several U.S. health insurance segments have been under pressure, prompting insurers to seek additional reinsurance support to manage large claims exposure and improve capital efficiency while looking to reduce earnings volatility,” said Jennifer Asamoah, senior financial analyst, AM Best.
A major driver behind the influx has been the rising exposure to catastrophic claims, which spurred rapid adoption of stop-loss coverage. Premiums ceded for stop-loss and excess-loss protections increased 50% year over year to reach $19.6 billion in 2025.
AM Best expects costs across the health care industry to continue rising, aided by the introduction of new high-cost specialty medications.
The increased cost of labor and supplies and an aging population, combined with the impact of changes to Medicare Advantage and Medicaid managed care, also will likely place added pressure on providers.
“Even if rising utilization and medical cost trends were to stabilize, the use of reinsurance would most likely continue as a part of insurers’ capital management strategy, helping to support future premium growth,” said Jaime Quito, financial analyst, AM Best.
According to the report, affiliated reinsurance agreements still account for a significant portion of the US health reinsurance sector.
However, ceded premiums to unaffiliated firms reached 47% in 2025, marking a decade-high share, with year-over-year expansion more than doubling the growth rate of affiliated premiums.
The largest line of total ceded health premium (i.e., affiliated and unaffiliated) in 2025 was comprehensive major medical, at USD 38 billion, closely followed by Medicare Advantage.
In 2025, premiums ceded to captives fell sharply by 56% to USD 5 billion from USD 11 billion in 2024, reversing a multi-year growth trend in captive usage within the health insurance sector.
Meanwhile, in the Asia-Pacific region, health insurers are increasingly turning to reinsurance solutions in response to evolving consumer demand, widening protection gaps, and regulatory shifts.
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