Insurance
Home›Insurance›Reinsurance›Reinsurance capital hits record $688 billion in first…
Reinsurance capital hits record $688 billion in first half of 2026
Gallagher Re lifted its 2026 reinsurance ROE outlook to 16.5% to 17.5%, citing strong first half earnings and lower-than-normal catastrophe losses.
Gallagher Re’s 2026 Half-Year Reinsurance Market Report says total dedicated reinsurance capital rose 5% in the first half of 2026 to a record $688 billion. The firm attributed the increase to continued growth in both traditional and alternative capital, with traditional capital up 4% and non-life alternative capital growing 9% over the period.
The report highlights a shift in how reinsurers are using excess capital, noting that while many carriers have boosted dividends and share buybacks, capital accumulation is still outpacing capital returns. Gallagher Re also said alternative capital momentum is expanding into a broader range of business lines, intensifying competition across parts of the market.
Despite that tougher backdrop, Gallagher Re’s Composite, which tracks leading global reinsurers, posted a 19.9% return on equity for the first six months of 2026. The firm linked the strong results to healthy underlying profitability and materially lower-than-normal natural catastrophe losses.
Reflecting the stronger first-half performance, Gallagher Re increased its full-year 2026 ROE forecast for the Composite to 16.5% to 17.5%, up from a previous 14% to 15%. Gallagher Re also said it expects the Composite to generate roughly $13 billion of cumulative profits above the cost of equity over 2017 to 2026, and it noted the industry could absorb a USD 50 billion to 75 billion insured loss event in addition to a normal second-half catastrophe.
The report warned that the industry challenge is increasingly capital deployment rather than capital generation, as capital is growing faster than revenues and adding to an existing supply-and-demand imbalance in many reinsurance markets.