Guy Carpenter, the reinsurance brokerage arm of Marsh Group, expects reinsurance companies to continue to achieve profitable returns in 2026, estimating that the reinsurance industry’s return on equity (ROE) will reach 16.6% this year.
In his July 2026 reinsurance renewal report, Guy Carpenter reported a return on equity of 16.6%, down from 18.9% in 2025, slightly higher than 16.4% in 2024, and well below the hard market peak of 21.9% in 2023.
Looking ahead, the reinsurance broker expects ROE to continue its downward trend until 2027 and 2028, when it is expected to be 15.6% and 15.3% respectively.
Guy Carpenter also estimates the cost of equity to be 10.5% in 2026, up from 9.7% in 2025, 10.2% in 2024, and slightly lower than 10.6% in 2023. The chart below, taken from Guy Carpenter’s reinsurance renewal report for July 1, 2026, shows the reinsurer’s profitability since 2017, plotting ROE versus cost of equity.
Guy Carpenter pointed out in the report that reinsurance company capital has reached an all-time high and is expected to grow 9% to $663 billion by 2025, including $540 billion in traditional capital and $123 billion in alternative capital.
This is up from $607 billion in dedicated reinsurance capital in 2024, which includes $500 billion in traditional capital and $107 billion in alternative capital.
Additionally, insurance industry losses in the first half of 2026, driven primarily by an active severe convective storm season, are expected to total approximately $35 billion, below the five-year inflation-adjusted average.
Last year, overall catastrophe losses reached $109 billion, down from $147 billion in 2024 and up from $104 billion in 2023.
Reinsurers’ share of global catastrophe losses continues to remain below pre-2023 levels due to an increase in attachment points since 1 January 2023 and a reduction in the number of high-severity events.
The reinsurance sector’s share of total catastrophe losses of $109 billion is 13%, reaching $14 billion by 2025, up slightly from 11% in 2024 but still trending downward from 2021-2023 levels.
