As the overall size of the reinsurance market continues to expand, projected to reach a new high of $649 billion at year-end 2025, market concentration has gradually declined as capital deployment becomes more diversified across the sector, AM Best has revealed.
For four consecutive years, the top five companies by capital, historically representing over 60% of the composite’s total capital, have experienced a decrease in their share.
By year-end 2024, when total dedicated reinsurance capital rose to $607 billion from $568 billion in 2023, the top five’s share of the composite dropped to 55.8%, down from 57.5% in 2023, marking the lowest level since 2018.
According to the report, the largest European reinsurers, also known as the big four (Swiss Re, Munich Re, Hannover Re, and SCOR), have maintained a strong presence, representing 21% of global reinsurance capital in 2024, a slight increase from the previous year.
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However, their contribution to traditional reinsurance capital growth is moderated by a higher share of primary insurance and shareholder-friendly policies like dividends and buybacks – compared to their Bermudian peers, explained AM Best.
Bermudian reinsurers, which make up about 15% of the global market, have been a significant factor in market diversification, AM Best highlighted.
This segment saw capital growth of 16% from 2023 to 2024, despite facing adverse reserve development in casualty lines and losses from hurricanes Milton and Helene in the fall of 2024.
“Increase in capital is largely driven by robust operating returns, which while lower compared to the outperformance of 2023, yielded combined ratios well below 100 in most cases,” analysts said.
Adding: “AM Best’s Bermuda reinsurers composite reported return on shareholders’ equity in the mid-to-upper teens, well above the five-year average of 10.9% for the segment. Although Bermudian reinsurers on average outperformed the overall global reinsurance market, generally each region reported favourable trends.”
According to estimates by AM Best and Guy Carpenter, global dedicated reinsurance capital is expected to climb to reach a new high of $649 billion at year-end 2025, surpassing the previous peak of $607 billion recorded last year.
Traditional reinsurance capital is expected to account for the bulk of the total estimated figure at $535 billion, which is a new high, continuing its long-standing dominance of the market.
However, third-party capital is also forecast to grow, reaching $114 billion, which is its highest level yet, and up on 2024’s year-end figure of $107 billion, and 2023’s $100 billion, amid a record-breaking first half of 2025 for the catastrophe bond market, a growing part of the third-party, or alternative reinsurance capital space.
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