This report provides in-depth analysis of the capital and profitability of the reinsurance industry, based on the Gallagher Reinsurance Index group of companies.
Key findings from this report
- Global reinsurance dedicated capital totalled USD729 billion at full year 2023, a rise of 12% versus the restated full year 2022 base. Growth was driven by both the INDEX companies and non-life alternative capital.
- Gallagher Re's in-depth analysis of a subset of 16 reinsurers shows the reported combined ratio improved to 88.9% (2022 FY: 94.6%). The underlying combined ratio also continued to improve, to 96% (2022 FY: 98.5%).
- The reported ROE rose strongly in 2023 FY, from 7.1% to 20.2%, largely spurred by a higher investment gains yield and a lower impact from natural catastrophes.
- Following exceptionally strong profitability in 2023, reinsurers have now fully recouped for weaker profits in 2017-2020.
- The underlying ROE was up materially to 14.3% (2022 FY: 12.0%), supported by improved underlying underwriting margins and higher running investment income.
- Whether viewed on a headline or underlying basis, reinsurers' ROEs comfortably exceed the industry's cost of capital.
