Reinsurance practices with global firms

The life insurance industry just hit a terrifying milestone: More than $1 Trillion in liabilities has been transferred offshore. Private equity firms aren't just buying insurance companies anymore, they're reshaping how the industry manages risk by pushing liabilities to jurisdictions with lighter regulations and lower capital requirements. In case you’re not already familiar with reinsurance, it’s basically insurance for insurance carriers. A (frequently offshore) reinsurance company takes on a portion of the carrier’s risk of payouts in return for a percentage of premiums. Reports released in the last few months by A.M. Best and S&P Global Market Intelligence show US life insurers have now shifted more than $1 trillion of liabilities to places like Bermuda, the Cayman Islands, and Barbados. For every dollar of reserve on a carrier’s balance sheet, there’s now $3.28 of credit from reinsurance. That number more than doubled since 2020. 🐟 Athene (Apollo) has transferred $193 billion to offshore affiliates 🐟 Global Atlantic (KKR) manages ~$190B of insurance liabilities, "the majority of which resides in Bermuda" 🐟 Prudential moved ~$7B to Bermuda just this year and previously sold $31B to Fortitude Re 🐟 MassMutual is now offloading liabilities offshore alongside the PE-owned carriers 🐟 MetLife launched Chariot Re and immediately moved ~$10B to it 🐟 Lincoln Financial formed Lincoln Pinehurst Reinsurance Company in Bermuda last year And the risk is real. A private equity-owned Bermudian reinsurer called 777 Re collapsed last year and the US insurers that ceded billions to it got burned. This is why we analyze the carrier just as much as the policy performance when making recommendations, and why independent analysis is more critical than ever before. If your clients have policies with any of these carriers, when was your last independent review?

The reinsurance market is quietly changing gear. The signals are clear if you’re close to renewals: timelines are compressing, quotes are landing late, underwriting teams are stretched, and “January capacity” is firmly back in play. That combination usually only appears when the market senses a turn. And it is turning. After several years of strong performance, capital is flowing back into reinsurance at scale — and with intent: • 5–7 new Lloyd’s syndicates and platforms preparing to write into the 2026 cycle • Cat bond and ILS issuance running at $20–25bn • Global reinsurance capital moving towards $820–860bn • Institutional investors re-engaging through sidecars, quota shares and structured capacity • Growing appetite for aggregate, multi-year and specialty risk Capital does not arrive without consequences. Across a number of classes, competitive tension is returning. Capacity is easier to assemble, terms are gradually loosening, and in some segments we are already seeing pricing pressure of 10–15%, despite another $100bn+ year of catastrophe losses. What changes next: • Reinsurers will need to work harder for returns — underwriting quality, portfolio construction and capital efficiency will matter more than headline growth • Cedants will see more options, greater leverage and faster shifts in renewal dynamics • Clients should benefit from improved availability and, over time, more efficient pricing • Market structure will continue to evolve, with tech-enabled MGAs and specialist platforms scaling as capacity expands For portfolios spanning London, AsiaPac, Latin America, the Caribbean, specialty international and emerging markets, this is a constructive phase — provided discipline holds and capital is deployed deliberately. The market isn’t breaking. It’s recalibrating. And 2026 will be a year that sets direction, not just prices. #Reinsurance #LondonMarket #Insurance #Lloyds #CapitalMarkets #CatBonds #Underwriting #SpecialtyInsurance #InsuranceLeadership

Gallagher Re first view available for 1/4. EXECUTIVE SUMMARY   The April 1 renewal activity saw more capacity and optionality for buyers, specific to class of business, geography, performance, strategy and scale. The reinsurance industry has reached a record traditional capital high of USD655 billion, supported by strong reinsurer results in 2023 and 2024. Many reinsurers are expecting attractive underwriting results and double-digit ROEs in 2025, assuming natural catastrophe losses stay within their 2025 budgets.    Growth and shareholder returns Reinsurers are eager for growth but are tempering stakeholder expectations regarding the extent of growth achievable in 2025. There is a noticeable trend of increased dividends and share buybacks as reinsurers address demands to utilize excess capital effectively.   Primary market conditions and catastrophe events  Primary companies have experienced varied fortunes over the past two years, influenced by localized losses and portfolio remediation efforts. The California wildfires serve as a poignant reminder of insurance's critical role in rebuilding lives and economies. These events raise questions about secondary perils and the necessary oversight for efficient market functioning.   Regional insights: Japan  Japan's headline rate changes indicate accelerated softening compared to major international renewals. Historical high catastrophe pricing post-2018 and 2019 typhoons has led to favorable conditions for buyers in 2024. Reinsurers' strong growth desire across various lines contributed to this positive movement.   Specialty markets and future outlook In specialty markets, the settlement of Ukraine/Russian aircraft leasing losses has prompted reserve increases among specialty (re)insurers. The global reinsurance market is expected to continue its differentiated approach to risk-adjusted rate reductions, focusing on maintaining profitable accounts while addressing loss-making ones.   Conclusion The pressure on reinsurers to demonstrate profitable capital deployment will intensify unless reinsurance demand increases over the next nine months. Reinsurers face choices between enhancing shareholder returns through dividends and buybacks or pursuing growth via mergers and acquisitions. While smaller acquisitions are gaining momentum, larger-scale M&A in the reinsurance sector remains a possibility. #insurance #reinsurance

International (offshore) reinsurance for U.S. life & annuities has accelerated—driven by (re)insurers seeking pricing competitiveness and reserving/capital frameworks that better align with how they manage risk. 🌍📈 The new International Reinsurance Landscape Overview for U.S. Life & Annuities brings it all into one place: • Key considerations (affiliate/sidecar/third-party structures, NAIC qualified/reciprocal, Solvency II, tax, asset management, and the evolving role of ICS) • A jurisdiction-by-jurisdiction view across Bermuda, Cayman Islands, Ireland, Luxembourg, Singapore, Puerto Rico, and more • Practical context on where activity is growing fastest—and why Check out the report from the Society of Actuaries Research Institute here: https://lnkd.in/egf9uu9m #ActuaryResearch #Reinsurance #LifeInsurance #Annuities #RiskManagement #InsuranceRegulation #CapitalManagement #GlobalInsurance