Reinsurance capital to rise 9% to $620b in 2024

Risk appetites continued to improve through H1 2024.

The dedicated reinsurance capital is anticipated to increase by 9%, reaching $620b in 2024, according to a joint projection by Guy Carpenter and AM Best. 

Guy Carpenter also pointed out that the reinsurance market in 2024 is characterised by strong profitability and growing capitalisation, with these trends expected to persist into 2025. 

Catastrophe bonds saw significant growth in the first half of 2024, with $12.2b in limit placed by 30 June, making Q2 the most active quarter on record. The total outstanding notional amount of catastrophe bonds exceeded $45.2b.

Risk appetites continued to improve through the first six months of the year, with underwriting discipline remaining. Building on mid-year momentum, “this current trading cycle is marked by engaged stakeholders actively coming to the table to provide critical capital and financial support to the economy,” David Priebe, Chairman at Guy Carpenter, said.

Guy Carpenter also noted that the market remains well-capitalised, and reinsurers are motivated to engage with cedents. Reinsurance demand is being met in an orderly trading environment, following a historic reset in property pricing and coverage in 2023.

Looking ahead to January 2025 renewals, negotiations in the casualty market are expected to focus on rate environment and portfolio performance, with adequate capacity available but with continued scrutiny across sublines.