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Traditional reinsurance capital to shrink, ILS to grow in 2022: AM Best & GC

According to the latest estimate and forecast for dedicated reinsurance capital from rating agency AM Best and broker Guy Carpenter, overall reinsurance market dedicated capital is expected to shrink, as traditional capacity falls, but ILS or third-party capital rises.

While reinsurance capital remains plentiful, according to AM Best’s latest market report, the current forecast is that financial market conditions will dent dedicated reinsurance capital for 2022.

“For year-end 2022, based on how the investment markets have reacted so far to the interest rate hikes as well as fears of sustained inflation and a potential recession, we expect a decline in overall available capital,” the rating agency explained.


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