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Reinsurance capital tops $663bn in 2025 as cat budgets shrink
AM Best said catastrophe probable maximum loss exposure was broadly unchanged in 2025, leaving catastrophe risk as a smaller share of the industry’s rising capital base.
Reinsurance News reports that dedicated reinsurance capital reached USD 663 billion at the end of 2025, a record level, as catastrophe risk budgets continued to fall. According to analysis cited by AM Best and reinsurance broker Guy Carpenter, total dedicated reinsurance capital rose from USD 607 billion at the end of 2024 to USD 663 billion by year-end 2025. The increase was driven by growth in both traditional reinsurance capital and third-party capital, supported by strong underwriting results, investment earnings, and investor demand for insurance-linked securities.
AM Best said catastrophe probable maximum loss exposure stayed broadly unchanged during 2025 even as the industry’s capital base grew, meaning catastrophe exposure now represents a smaller proportion of available capital. The agency added that this setup gives reinsurers greater capacity to absorb large losses and potentially support additional underwriting or larger capital buffers.
Reinsurance News also noted that required capital remained broadly stable during 2025. That contributed to lower capital utilisation for traditional reinsurers to 77% at year-end 2025, down from 85% in 2024 and 92% in 2023, with AM Best expecting it to fall further to 72% in 2026.