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Dedicated reinsurance capital seen rising to $705bn by 2026
AM Best and Guy Carpenter forecast total dedicated reinsurance capital of $705.0bn by end-2026, up from $663.0bn a year earlier, with third-party capital reaching a record $130.0bn.
Dedicated reinsurance capital is expected to keep growing in 2026, supported by continued underwriting and investment returns and by more participation from third-party capital, according to AM Best and reinsurance broker Guy Carpenter. In their outlook, AM Best and Guy Carpenter project total dedicated reinsurance capital will reach $705.0 billion by the end of 2026, up from $663.0 billion at the end of the prior year. They also forecast traditional capital rising from $540.0 billion in 2025 to $575.0 billion in 2026, while third-party capital is projected to climb to a record $130.0 billion.
AM Best said the expansion of dedicated capital has been driven largely by existing market participants retaining earnings rather than by a major new wave of reinsurers entering the market, which would typically intensify competition. The rating agency said the lack of a comparable influx of new companies has helped limit competitive pricing pressure. AM Best also noted that whether this pattern can continue is a key question as capital levels reach record territory. It said reinsurers now have more ways to deploy capital than in earlier cycles, including using diversified operations that span primary insurance, specialty underwriting and alternative capital, as well as potential acquisitions, business expansion and increased shareholder distributions.