According to AM Best, a composite of seven reinsurance groups domiciled in the US and Bermuda—where reinsurance constitutes the majority of their underwriting portfolios—continued to demonstrate favourable performance in 2024.
AM Best reports that the composite achieved its fourth consecutive year of underwriting profitability, with a combined ratio of 89.5 in 2024.
While this represents a 4.4-point increase compared with 2023, AM Best notes that the figure still reflects a strong improvement relative to results recorded in years prior to 2023.
Overall profitability for 2024 was lower than the exceptional outcomes seen in 2023, when the composite not only recorded historically strong underwriting margins but also benefited from higher net investment income, significant realized and unrealized investment gains, and the positive impact of the Bermuda Corporate Income Tax (CIT) Act of 2023.
AM Best highlights that total net premiums written (NPW) for the composite rose 13.2% in 2024, up from 5.3% in 2023. Growth in 2023 had been constrained by increased reinsurance cessions by Transatlantic to Berkshire Hathaway Inc. affiliates.
Property and casualty (P/C) gross written premiums climbed 12.3% in 2024, compared to 10.5% in 2023 and 10.7% in 2022. AM Best attributes the higher growth in 2024 primarily to RenaissanceRe, following the renewal of business acquired in the Validus transaction. Excluding RenRe, P/C premium growth moderated to 9.5% in 2024 from 12.9% in 2023.
AM Best observes that this broader trend of slowing top-line growth reflects a reduction in rate improvements across several lines, particularly property exposures, where pricing began to soften in 2025 after strong results in 2023 and 2024.
Nevertheless, AM Best emphasises that property reinsurance pricing remains higher than pre-2023 levels, and reinsurance terms and conditions have generally remained unchanged. Looking ahead, AM Best expects premium growth in 2025 to be slower than in 2024, driven by ongoing demand for reinsurance capacity but tempered by moderate rate easing in property catastrophe, directors and officers, and cyber lines.
AM Best reports that natural catastrophe activity remained elevated in 2024, with estimated global insured losses reaching approximately USD 140 billion—the third-highest on record—and exceeding USD 100 billion for the fifth consecutive year. Catastrophe events added 6.7 points to the composite’s combined ratio, compared to 4.0 points in 2023.
Loss reserve development was less favourable in 2024, contributing only 0.3 points of favourable development versus 3.7 points in 2023. AM Best notes that five of the seven composite companies reported favourable reserve development in 2024, down from all seven in the prior year.
According to AM Best, strong investment performance continued to support earnings, with substantial realized and unrealized gains and higher net investment income in 2024.
The composite posted a return on equity (ROE) of 16.8%, compared with 23.0% in 2023, when results had benefited from one-time accounting gains tied to Bermuda’s transition to a global minimum tax. AM Best also highlights that net investment income has more than doubled over two years, reaching USD 8.8 billion in 2024 from USD 3.7 billion in 2022, driven by higher reinvestment rates on fixed-income assets.
AM Best reports that the composite’s GAAP equity grew 9.6% in 2024, slightly lagging NPW and loss reserve increases. While underwriting and reserve leverage rose slightly, levels remain manageable.
Despite strong performance in 2023 and 2024, AM Best observes that new company formation in the US and Bermuda reinsurance market has remained limited.
The rating agency attributes this to the abundance of capital and investor caution, as ongoing challenges such as climate risk, social inflation, and elevated interest rates create a high hurdle for reinsurers to meet their cost of capital.
AM Best expects future capital flows to favour established reinsurers with proven track records, while opportunities for new entrants are likely to remain constrained.
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