New data from broker Gallagher Re shows that global reinsurance dedicated capital totalled $728 billion at the end of 2021, representing growth of 8.4% over the previous year.
Capital had ended the previous year at $672 billion, according to the latest reinsurance market report by Gallagher Re.
Since 2015, total reinsurance dedicated capital has grown by 70% which equates to an average annual pace of 6%.
The report shows that INDEX companies’ capital grew by 10% to $610 billion last year and now represents 84% of the reinsurance industry’s capital base, while alternative capital followed the same direction and went up by around 4%.
Including other major regional and local reinsurers, and a pro-rated portion of capital within major groups, Gallagher Re estimates there to be $635 billion of capital for the traditional reinsurance market, up from $581 billion in 2020.
A majority of reinsurers reported strong results for 2021 with improved capital positions backed up by rising equity markets and retained profitability, analysts at the brokerage noted.
Additionally, 2021 non-life ILS market capacity resumed growing and reached its highest ever level at $94 billion, driven by significant growth of the catastrophe bond space.
The overall ILS market similarly experienced a period of rebalancing in 2021, with capital allocation shifting away from less liquid ILS structures, as investors instead preferred the transparency and liquidity available through the catastrophe bond instrument.
Gallagher Re’s recent 1st View report on the April reinsurance renewals characterised the period as “undramatic” and “balanced”, with James Vickers noting the influence of an orderly Japanese market.
