Credit rating agency AM Best has maintained its stable outlook for the global life reinsurance segment, driven by the expected moderate growth in global life channels and a concentrated traditional reinsurance market, which is dominated by several highly rated, diversified, and well-capitalised global companies with favourable underwriting results.
The report noted, “Life reinsurance accounts for a significant share of gross premiums written, with the United States remaining the largest geography. Most large life reinsurance carriers also diversify their business profile with non-life reinsurance and maintain strong risk-adjusted capitalisation, with a measured risk approach to liability management.”
A handful of companies own the majority of the market share in global life reinsurance, driven by sustained long-term client relationships. Operating scale and the benefits of strong technical, actuarial, and risk management expertise support future growth, said AM Best.
AM Best believes that life reinsurers serve as business partners who offer services beyond biometric risk transfer solutions, such as balance sheet optimisation, underwriting support, and actuarial data. The number of offshore annuity reinsurers has increased in recent years, as has the use of offshore entities by existing players.
The report explained, “These companies have mainly focused on asset-intensive reinsurance and block transactions of legacy annuity books of business. Private equity/asset managers have been increasingly getting involved in this space and adding to the growing competitive pressures. This has brought an increased focus on the regulations that oversee these new formations.”
The Best report added that the segment benefits from a mostly stable global regulatory environment. Global life reinsurers operating in the US and Europe are currently facing no major concerns. This includes Solvency II in the European Union and robust regulation in the US, including recent AG 55 annual asset adequacy testing for US life insurers ceding asset-intensive business to offshore or other reinsurers.
Taking a look at Japan, the volume of reinsurance ceded by insurers has increased steadily in recent years, partially driven by the implementation of an economic value-based solvency regulation framework, J-ICS, that became effective on 31 March 2026, and is closely aligned with the Insurance Capital Standard (ICS).
AM Best continues to monitor evolving regulations in offshore jurisdictions, including Bermuda. It should be noted that there is an uptick in reinsurance activity, especially in the Cayman Islands.
In terms of opportunity, AM Best expects continued growth in US individual life, where first-year and single premium increased 10% in 2025. Emerging markets growth will also help bolster global life reinsurers.
AM Best said, “There are opportunities as well in the US annuity market due to robust market growth. This is expected to be supported by continued capital growth, including new private equity and asset manager participation. The industry has performed well through solid underwriting and favourable investment yields.
“Mortality levels have stabilised in recent quarters, and the industry looks to see what type of impact there may be from Glucagon-like peptide-1s (GLP-1) due to their potential to improve mortality and morbidity outcomes. In addition, reinsurers are increasingly comfortable using mortality improvements in pricing assumptions.”
Lastly, some moderating factors that could change the outlook for the segment are global economic uncertainty and continued growth in offshore reinsurance.
