AM Best estimates that traditional reinsurance capital will drop by roughly $40 billion to $435 billion at year-end 2022, after hefty jumps recorded in each of the prior three years.
The projected 8.4 percent decline to $435 billion for 2022 from $475 billion in 2021, following increases of 15.5 percent for 2019, 8.9 percent for 2020 and 10.7 percent in 2021, takes into account both the tailwinds of the underwriting market and the headwinds of the capital and investment markets.
To come up with the 2022 forecast, AM Best is also considering continued geopolitical turmoil and a potential decline in global GDP, the rating agency said in a report published on Monday morning, “Dedicated Reinsurance Capital Growth of 2021 May Not Continue.”
