Over the past decade, total dedicated capital for life reinsurance across both traditional and asset-intensive markets has grown significantly, with Guy Carpenter and AM Best projecting this trend to continue, with a further 10% increase in 2025 to an estimated total of more than $160 billion deployed globally.
In a recent report, Guy Carpenter, the reinsurance broking arm of Marsh, said the expansion of dedicated life reinsurance capital has been driven in part by private-equity-owned reinsurers and asset managers entering the market via reinsurance companies or sidecars, attracted by the opportunity to gather AUM and management charges for originating appropriate investments.
This third-party capital accounted for around one-third of total capacity in 2025, reflecting the attractiveness of the life reinsurance market. This marks more than a doubling of third-party capital relative to Guy Carpenter’s estimate of circa $24 billion in 2022 to around $57 billion in 2025.
Guy Carpenter also noted that the expansion of life reinsurance capital has not been limited to specific regions or geographies, despite ongoing global headwinds and a fractured geopolitical environment. In fact, each region has seen material growth in life reinsurance capital over the past decade, which the firm expects to continue as more cedants seek to benefit from a competitive global reinsurance environment.
Over the past year, Guy Carpenter has estimated an increase in reinsurance capital provision to life reinsurance across North America of around 18%, with Europe/UK and Asia edging slightly ahead with 28% and 29% year-on-year increases, respectively.
This aligns with increased interest in UK pension risk transfer, European asset-intensive transactions, and Japanese asset-intensive and pension risk transfer transactions from a reinsurance perspective.
The reinsurance broker expects the relative increase of capital provision in Asia to continue diverging further relative to North America and Europe/UK over the next few years.
Guy Carpenter noted that geographies typically considered non-core for many reinsurers have also seen a commensurate increase in reinsurance capital deployed in the life space, with estimated growth of around 19% year-on-year across other regions combined.
“While this is likely attributable to specific countries and geographies, we are of the view that this is evidence of a combination of reinsurers looking further afield for business and cedants from “developing” jurisdictions becoming increasingly sophisticated across the globe as their life markets mature. Growing reinsurer interest in these regions reflects the growing competitiveness of the more established markets, to the benefit of cedants worldwide,” said Guy Carpenter.
The report highlighted that life and annuity reinsurers remain well capitalised, leveraging their capabilities to offer solutions that enhance capital efficiency and manage risk.
A notable influx of new capital and capacity—particularly from third parties such as investment manager-owned reinsurers and private-equity-backed entrants—has intensified competition and spurred innovation, especially in asset-intensive and structured reinsurance products.
“As the global life insurance sector moves into the second half of the decade, this growing reinsurance capacity will continue to offer a tempting solution for life insurers looking to de-risk and move to more “capital-light” business models—especially in regions and geographies that, to date, may not have focused as much on this aspect of their business models,” Guy Carpenter concluded.
