Guy Carpenter, the reinsurance broking arm of Marsh, expects reinsurers to continue delivering profitable returns in 2026, estimating that the reinsurance industry will generate a return on equity (ROE) of 16.6% for the year.
Reported in its July 2026 Reinsurance Renewal Report, Guy Carpenter’s estimate of a 16.6% return on equity is down from 18.9% in 2025, slightly up from 16.4% in 2024, and well below the hard market peak of 21.9% in 2023.
Looking ahead, the reinsurance broker expects returns on equity to continue trending down into 2027 and 2028, with estimates of 15.6% and 15.3%, respectively.
Guy Carpenter has also estimated a 10.5% cost of equity for 2026, up from 9.7% in 2025, 10.2% in 2024, and down slightly from 10.6% in 2023. The chart below, taken from Guy Carpenter’s July 1 2026 reinsurance renewal report, shows reinsurer profitability since 2017, plotting the ROE against the cost of equity.
Within its report, Guy Carpenter noted that reinsurer capital has reached an all-time high, forecasted to have grown 9% in 2025 to $663 billion, comprising $540 billion of traditional capital and $123 billion of alternative capital.
This is an increase from $607 billion of dedicated reinsurance capital in 2024, made up of $500 billion of traditional capital and $107 billion of alternative capital.
In addition, total insured industry losses for H1 2026, driven primarily by an active severe convective storm season, are projected to be approximately $35 billion, below the five-year inflation-adjusted average.
Last year, overall insured catastrophe losses amounted to $109 billion, down from $147 billion in 2024 and up from $104 billion in 2023.
Reinsurers’ share of global catastrophe losses continues to be lower than pre-2023 levels, driven by higher attachment points since 1st January 2023 and a lower number of high-severity events.
For 2025, of the total $109 billion of insured catastrophe losses, the reinsurance segment’s share was 13% at $14 billion, up slightly from 11% in 2024, but still trending down from 2021–2023 levels.
