Global dedicated reinsurance capital is projected to reach a new record level of USD 705 billion in 2026, according to AM Best’s latest market segment report. This follows a 9% year-over-year increase in 2025, when total dedicated capital rose to USD 663 billion. The expansion highlights the continued strength of traditional reinsurers and the diversification of capital deployment across the sector.

The report, titled "Reinsurance Capital Reaches New Highs as Risk Budgets Decline," notes that traditional reinsurers generated another year of strong underwriting and investment earnings. This performance allowed the industry to retain capital even as companies returned value to shareholders and pursued new growth opportunities. Simultaneously, the insurance-linked securities (ILS) market continued to attract investors seeking exposure to insurance risk that remains relatively uncorrelated with broader financial markets.

What the Numbers Show

A key divergence emerged between available and required capital in 2025. While available capital grew significantly, required capital remained relatively flat. Dan Hofmeister, associate director at AM Best, noted that this divergence has created increasingly substantial capital buffers across the sector. These buffers provide reinsurers with greater flexibility to absorb volatility, pursue growth opportunities, return capital to shareholders, or redeploy capital into primary and specialty insurance markets.

Furthermore, catastrophe probable maximum loss (PML) exposure remained broadly stable during 2025. Despite the expansion of available capital, the industry did not materially increase its aggregate catastrophe exposure. Consequently, catastrophe risk budgets—measured as catastrophe PML exposure relative to available capital—continued to decline. Patrick Cyphers, financial analyst at AM Best, stated that this decline indicates reinsurers are carrying less catastrophe exposure relative to their capital bases, providing additional protection against large loss events.

Capital Composition and Projections

The total dedicated reinsurance capital comprises traditional reinsurance capital and third-party capital. AM Best estimates traditional capital, while Guy Carpenter estimates third-party capital.

Traditional reinsurance capital increased to an all-time high of USD 540 billion at year-end 2025, up from USD 500 billion in 2024. It is projected to rise by 6.5% to USD 575 billion in 2026. Third-party capital also reached a record level in 2025, increasing to USD 123 billion. The estimate for 2026 stands at USD 130 billion, driven predominantly by strong investor demand for catastrophe bonds and other ILS instruments.

Bermudian reinsurers continued to expand their share of the global market, representing approximately 16% of global reinsurance market capital in 2025, up from 15% in the prior year.

Industry Outlook

AM Best will release additional reports ahead of the Rendez-Vous de Septembre in Monte Carlo, including rankings of top global reinsurance groups and in-depth analyses of Lloyd’s, life/annuity, health, and regional reinsurance markets. AM Best will host its annual reinsurance market briefing on Sept. 6, 2026, at 10:15 am (CEST) during the event.

AM Best will hold its annual Reinsurance Market Briefing at the 2026 Rendez-Vous de Septembre (Rendez-Vous) on Sunday, 6 September at 10:15 a.m. (CEST) at the Hotel Hermitage in Monte Carlo. This open-invitation event provides delegates with critical market insights ahead of bilateral meeting schedules, featuring perspectives from senior management and analytical personnel across AM Best’s global offices.

The briefing aims to address key uncertainties in the global reinsurance sector. Delegates will hear AM Best’s latest outlooks, including analysis on whether rate adequacy can be maintained on property reinsurance covers and the drivers behind future rating movements. The session also addresses the growing influence of alternative capital and insurance-linked securities (ILS) on market dynamics.

Key Discussion Topics

The agenda for the briefing includes the following core themes:

AM Best publishes comprehensive global reinsurance analyses covering major themes, sub-sector segments, and regional markets. These reports include rankings of the largest players by premium volume. The 2026 special reports will be available from August, providing data-driven context for the discussions at the Rendez-Vous.

What the Numbers Show

While specific financial figures are not disclosed in this announcement, the focus on rate adequacy and alternative capital highlights structural shifts in the reinsurance market. The emphasis on "drivers of future rating movements" suggests that AM Best is closely monitoring how non-traditional capital sources are altering risk distribution and pricing stability across the sector. Investors and industry participants should monitor the August release of special reports for quantitative benchmarks on premium volume and player concentration.

About AM Best

AM Best is a global credit rating agency, news publisher, and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company operates in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore, and Mexico City.