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Reinsurance capital shrinks, ILS market share grows to 15%: Gallagher Re

Alternative reinsurance capital, so the capacity deployed through insurance-linked securities (ILS) structures including catastrophe bonds, has remained relatively flat since 2021, but with traditional reinsurance capital having shrunk, the ILS market’s share has increased, according to Gallagher Re.

In a report released today, broker Gallagher Re highlights the decline in traditional reinsurance market capital, as investment losses dent the sector’s capacity potential.

This is even though the traditional reinsurance sector has been recording consecutive quarters of strong premium growth, as well as improving underlying profitability.

Total capital dedicated to the global reinsurance industry fell by around 11% at half-year 2022 to $647 billion, down from $729 billion, according to Gallagher Re, which the broker puts down largely to mark-to-market investment losses.


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