Kathmandu. At the April 1, 2026 renewal, global reinsurance capital reached a record high of $785 billion. That’s about 10 percent more than in 2025.
According to Aon Plc’s latest Reinsurance Market Report, this growth in reinsurance capital is primarily driven by strong underwriting income, gains in the bond market, and continued capital infusion from both traditional reinsurance companies and alternative investors. “Particularly in the Asia-Pacific market, the increase in available capacity for property distress business helped to soften reinsurance rates on prime lines,” the report said. Some areas saw declines of 15 percent to 20 percent, as well as higher limits and longer coverage terms. ’
Similarly, the demand for reinsurance has also increased by about 10 percent. That’s because insurance companies have taken advantage of better pricing conditions to expand coverage and support growth strategies.
Reinsurance companies delivered a strong financial performance in 2025 and most are expected to earn more than their capital costs in 2026, assuming general catastrophe loss activity, the report said. “Lower-than-expected catastrophic losses supported profitability in many areas,” the report said, “while competition for insurance-related securities impacted pricing dynamics.” ’
According to analysts, there is considerable capital and disciplined underwriting in the global market. Which is supporting steady returns despite softer pricing. However, rising geopolitical tensions (particularly in the Middle East) remain a source of uncertainty. However, they have not significantly changed the current soft market conditions.
The influx of capital has increased competition in the reinsurance sector. It has created favorable conditions for sedents. However, reinsurers have been pressured to maintain underwriting discipline.
Riverstone International, a specialist in legacy insurance and reinsurance solutions, has highlighted the strength of the reinsurance sector. Last year’s strong performance supports continued activity in run-off acquisitions. “Conditions will remain favourable for buyers in the near future,” the report said, adding that future pricing stability will depend on continued capital discipline and the absence of significant losses. —Agency
