By the end of September this year, the amount of alternative capital in the reinsurance industry had increased by 5% over the nine-months of 2024, to reach another new high of $113 billion, helped by retained earnings and catastrophe bond market inflows, broker Aon has said.
Overall, total dedicated reinsurance market capital expanded by almost 7% over the first nine-months of 2024, with some $45 billion added to the sector’s underwriting firepower.
Traditional reinsurance capital grew the fastest, with Aon estimating more than 7% growth from $562 billion at the end of 2023, to a new high of $602 billion at the end of September 2024.
Driving reinsurer capital higher were retained earnings and unrealised gains on bonds that contribute directly to equity, the broker explained.
Alternative reinsurance capital, so largely representing the capacity deployed by insurance-linked securities (ILS) fund managers and by market players through other ILS structures, grew more slowly than traditional over the nine-months, by Aon’s estimate.
Alternative and ILS capital sat at $108 billion at the end of 2023, but expanded by 5% to $113 billion by September 30th 2024, Aon reports.
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