Kathmandu. Global reinsurance capital reached $805 billion in the first half of 2025. Which is 4.8 percent more than the full year of 2024.
This growth index has been maintained by both the company and non-life alternative capital. Non-life alternative capital rose 3.6 per cent to $118 billion on net investment and favorable performance, according to Gallagher Riley. “Given the industry’s full-year profit outlook and capital returns, we estimate that traditional reinsurance capital will grow by about 8 percent (more than $57 billion) in 2025,” the Gallagher Relay said, adding that private insurance markets and public insurance companies are expected to provide coverage of at least $84.38 billion in natural disaster damage in the first six months of 2025. That’s more than $61.39 billion originally reported for 2024. This is the most expensive half-yearly for the insurance industry since 2011 and is 55 percent higher than the average ($54 billion). ’
The damage has increased due to activities such as devastating wildfires in Los Angeles, California, and strong storms in the United States in January. While the rest of the world has seen such activities below average. Which probably explains the widespread spread of natural disasters in different areas.
“Reinsurance companies are well positioned to maintain strong profits in FY25,” the reinsurance broker said. Considering the ‘normal’ level of damage caused by natural disasters, we expect the underlying ROE of 13-14 per cent and the core ROE of about 17-18 per cent for the entire year to be much above the industry’s capital costs. ’
Traditional reinsurance capital is projected to grow by about 8 per cent in 2025 in support of continued strong profits. The reinsurance industry is backed by significant capital buffers that can absorb potential sources of volatility. Continued lucrative profits mean the industry remains financially strong and is well placed to cope with any potential volatility in the future.
Gallagher Re’s in-depth analysis of a subset of 16 reinsurance companies around the world, despite being at historically strong levels, has prepared the report. In 2025, the underlying combined ratio increased to 87.5 per cent (84.6 per cent in 2024) and 94.7 per cent (94.2 per cent in 2024), respectively.
The capital adequacy of global reinsurance companies remains strong on an economic basis. Which Gallagher has considered more relevant in the decision-making of the relay management teams. The average solvency of the top four European reinsurance companies rose slightly to 268 percent (265 percent in 2024). On average, the target set by these companies is far above the upper end of the solvency range.
