Third-party capital in reinsurance, including that from catastrophe bonds and insurance-linked securities (ILS), could grow by as much as 10% in 2024, with AM Best and broker Guy Carpenter projecting it will be at $105 billion to as high as $110 billion by year-end.
Industry capitalisation remains high, but still rating agency AM Best believes the pricing environment will prove to be more sustainable this time around.
With reinsurance capacity being provided for capital protection more than earnings protection, the reset in price, attachments and terms is expected to remain largely sticky and companies are expanding into the improved reinsurance market conditions, while investors are appreciating the improved returns and risk-sharing arrangements.
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