This report provides in-depth analysis of the capital and profitability of the reinsurance industry, based on the Gallagher Reinsurance Index group of companies.
Key Findings:
- Global reinsurance dedicated capital totalled USD766 billion at half year 2024, an increase of 5.4% versus the restated full year 2023 base. Growth was driven by both the INDEX companies and non-life alternative capital.
- Gallagher Re's in-depth analysis of a subset of 16 reinsurers shows the reported combined ratio further improved to 84.5% (2023 HY: 87.0%). The underlying combined ratio also continued to improve, to 93.6% (2023 HY: 96.1%).
- The reported ROE remained exceptionally strong at 19.6% (2023 HY: 19.2%). The underlying ROE increased to 15.5% (2023 HY: 13.6%), supported by improved underlying underwriting margins and higher running investment income.
- Whether viewed on a headline or underlying basis, reinsurers' ROEs continue to comfortably exceed the industry's cost of capital.
- As a result of the strongly improved profitability in recent years, the reinsurers' have now fully recouped for weaker profit years (2017-2020) and earned a margin on top.
- Overall the industry is in a strong position to absorb any potential future volatility.
