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Reinsurance capital reaches record USD 663 billion amid pricing pressure
The global reinsurance sector is experiencing a significant shift as dedicated capital reached a record USD 663 billion at the end of 2025. According to analysis from AM Best and Guy Carpenter, this increase was driven by growth in both traditional reinsurance capital, which rose to USD 540 billion, and third-party capital, which reached USD 123 billion. Despite this capital surge, catastrophe risk budgets have declined, meaning catastrophe exposure now represents a smaller proportion of available capital.
AM Best warns that the industry is at a critical inflection point. Record capital levels and heightened competition are placing downward pressure on reinsurance prices, particularly in non-life insurance lines. There is growing concern regarding whether reinsurers can maintain underwriting discipline or if the market will enter a cycle of ‘irrational competition.’
In the Asia-Pacific region, a significant catastrophe protection gap persists. Data from Aon indicates that insurers covered only USD 1 billion of USD 10 billion in regional catastrophe losses during the first half of the year, leaving a protection gap of approximately 90%. Affordability remains a primary barrier to coverage in these markets, exacerbated by climate change risks such as typhoons, floods, and wildfires.
Entities
AM Best · Aon · Guy Carpenter
Claims
What the coverage asserts, and how many sources carry each claim.
- [○ 1 SOURCE] The global reinsurance segment is at a critical inflection point due to record capital levels and increasing price pressure. segurosnews.com
- [○ 1 SOURCE] Dedicated reinsurance capital is projected to reach USD 705 billion by the end of 2026. www.reinsurancene.ws
- [○ 1 SOURCE] In the first half of the year, insurers covered only USD 1 billion of USD 10 billion in catastrophe losses in the Asia-Pacific region. insuranceasia.com
- [○ 1 SOURCE] The catastrophe protection gap in the Asia-Pacific region remained at approximately 90%. insuranceasia.com
- [○ 1 SOURCE] Traditional reinsurance capital increased from USD 500 billion to USD 540 billion during 2025. www.reinsurancene.ws
- [○ 1 SOURCE] Dedicated reinsurance capital reached USD 663 billion at the end of 2025. www.reinsurancene.ws
- [○ 1 SOURCE] Lower income levels are a major constraint to insurance affordability in the Asia-Pacific region. insuranceasia.com
- [○ 1 SOURCE] Third-party capital grew from USD 107 billion to USD 123 billion. www.reinsurancene.ws