The report provides in-depth analysis on the capital and profitability of the global reinsurance industry, based on the Gallagher Reinsurance Index group of companies.
Key findings
- Global reinsurance dedicated capital totalled USD709B at half-year 2023. This is up 13% from the restated full-year 2022 base, driven by strong investment performance and steadily improving underwriting results.
- The global reinsurance industry's capital adequacy remained robust and indeed generally improved versus full-year 2022.
- The reported combined ratio improved to 87.6% (2022 HY: 89.2%). The underlying combined ratio also continued to improve, to 95.4% (2022 HY: 97.7%). The underlying combined ratio in particular was the strongest underwriting performance achieved over the ten years Gallagher Re has conducted this analysis.
- The underlying ROE increased to 13.4%, a material improvement over 10.2% at 2022 HY, driven by improved underlying underwriting margins and higher running investment income.
- The reported ROE improved even more strongly to 19.3% (2022 HY: 4.4%), driven additionally by investment gains.
- For the second year in a row the underlying ROE is well above the cost of capital after an elongated period of sub-par returns.
- Higher interest rates and rate increases booked at renewals YTD provide a tailwind and the potential for reinsurers to improve ROE further.
