For the third year in a row, global reinsurers generated returns well above the cost of capital due to positive underwriting results driven by repricing and derisking of reinsurance portfolios, according to a new AM Best report.

The Best’s Market Segment Report, “Reinsurers’ Returns Exceed Cost of Capital Despite Softening Market,” is part of AM Best’s look at the global reinsurance industry ahead of the Rendez-Vous de Septembre in Monte Carlo. Other reports, including AM Best’s ranking of the top global reinsurance groups and in-depth looks at the insurance-linked securities, Lloyd’s, life/annuity, health and regional reinsurance markets, will be available during August and September.

According to this report, the reinsurance industry’s weighted average cost of capital increased to 8.23% in 2025 from 7.67% in 2024. It rose further in the first quarter of 2026, to 8.63%. At the same time, high levels of capital and capacity in the global reinsurance market are driving a softening trend, which accelerated in 2026.

“Reinsurers’ changes to program structures, such as tightened terms and conditions and a sharp increase in attachment points, have proven durable despite the softening market,” said Helen Andersen, industry analyst, AM Best. “The measures have allowed reinsurers to weather the increased frequency and severity of secondary perils.”

Other report takeaways include:

• Most reinsurance players had exceptional returns in 2025, with a median return on equity (ROE) of 16.3%, just marginally lower than the previous record-setting returns of 2023.
• Cost of equity, which was 9.6% in 2025, increased for a fourth-straight year. The higher cost of equity raised the cost of capital despite lower interest rates.

To access the full copy of this market segment report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=367358.

For global reinsurance reports ahead of Rendez-Vous de Septembre, as well as video coverage of the event, please visit AM Best’s Reinsurance Information center.

Lastly, AM Best will host its annual reinsurance market briefing at Rendez-Vous de Septembre on Sept. 6, 2026, at 10:15 a.m. (CEST) in Monte Carlo. For more information, please visit the event website.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2026 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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