Kathmandu. Globally dedicated reinsurance capital surpassed a record $663 billion at the end of 2025 as traditional reinsurance companies and third-party investors continue to add capital. That was $ 607 billion a year ago. However, the amount needed to support the risk of the reinsurance industry has remained largely stable.
According to AM Best, the gap between the available and required capital has strengthened the financial buffer of reinsurance companies. Capital utilization for traditional reinsurance companies has fallen from 85 percent in 2024 to 77 percent in 2025. This is because if the available capital increases, the capital required remains largely constant.
The AM Best report said, “The improvement in capital utilisation does not reflect any significant reduction in the risk taken by the industry.” Instead, reinsurance companies pooled capital while being broadly conservative in their usage. Conventional reinsurance capital has increased from $500 billion in 2024 to $540 billion.
Reinsurance companies in the U.S. and Europe accounted for 73 per cent of the dedicated reinsurance capital, while Bermuda’s share rose from 15 per cent to 16 per cent. The five largest companies accounted for 54.2 percent of the market capitalization. This is the lowest since 2018, down from 55.8 percent a year ago.
The reinsurance capital growth was supported by strong underwriting and investment income. Capital companies benefited from better margins, disciplined terms, and investment income from fixed-income portfolios. Much of the growth came from retained income, rather than from the creation of new reinsurance companies. –Agency
