Global reinsurer capital increased by 17 per cent to US$670 billion in 2023, according to Aon. Aon’s report shows a 16 per cent increment in alternative capital, reaching a record US$108 billion. Shareholders' equity in global reinsurance firms rose by US$80 billion, reaching US$562 billion by the end of 2023. This growth follows a US$97 billion decline in 2022, attributed to rising global interest rates. Aon attributes the capital growth to retained earnings, recovering asset values and a booming catastrophe bond market. The company notes a near-complete rebound in reinsurer capital in 2023, with continued investor interest into 2024. However, concerns over climate change and social inflation hinder new company formations. Aon anticipates strong performance from established reinsurers in 2024, as well as newly generated capital to lower reinsurance market pricing and terms for future renewals.
