Reinsurers are benefiting from maturing partnerships with alternative capital providers, helping them to consistently exceed their capital costs, a new report from rating agency AM Best has highlighted.
For the third consecutive year, global reinsurers have generated returns well above the cost of capital, which AM Best states is due to positive underwriting results that have been driven by repricing and derisking of reinsurance portfolios.
According to the agency’s report, the reinsurance industry’s weighted average cost of capital increased to 8.23% in 2025 from 7.67% in 2024, and then rose further again in the first quarter of 2026, to 8.63%.
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