Kathmandu. The year 2025 is a historic year for the global reinsurance industry, achieving excellent profits and capital growth.
According to the Gallagher-RICO Full Year 2025 Reinsurance Market Report, total reinsurance dedicated capital has increased by 11 percent from 2024 to a new high of $648 billion. That’s the second-strongest year for capital growth in more than a decade. This growth was driven by income maintained in traditional reinsurance capital and historic inflows into non-life alternative capital.
The Gallagher RICO Reinsurance Composite tracks the performance of leading reinsurance companies. It has reported an ROE of 19.3 percent for 2025. That was supported by strong underlying profits and general natural disaster losses. This is one of the highest ROEs recorded since the inception of the Reinsurance Market Report.
According to Michael van Wagenen, head of international at Gallagher Re Global Strategic Advisory, 2025 has been a historic year for the reinsurance industry. “Reinsurance companies have achieved historic levels of profitability and capital growth,” he said.
Returns are expected to moderate, as Gallagher Reilly forecasts a 14-15 percent ROE for composites in 2026. This includes generalized natural disaster losses and contributions from capital gains and reserve releases.
Traditional reinsurance capital growth is expected to slow to 4 percent. However, additional capital accumulation is likely to continue. This poses challenges for capital mobilization in soft markets. “However, the reinsurance industry has enjoyed exceptional returns for many years. As evidenced by rate softening during the January 1 and April 1 renewals, supply and demand dynamics have shifted in favor of buyers,” Wagenen said, adding that despite this, the industry remains resilient and profits are expected to be well above the cost of equity in 2026. —Agency
