Alternative capital reaches record 147 billion dollars
Global non-life alternative reinsurance capital increased by 9% to a record $147 billion in the first half of 2026, driven by favorable returns and net inflows of capital. According to reinsurance broker Gallagher Re, total reinsurance capital rose by 5% in the period to a high of $688 billion.
Gallagher Re’s report shows that global reinsurers produced another period of strong profitability and capital growth in the six month period, despite a very competitive operating environment.
Both traditional and alternative reinsurance capital growth has been strong since 2023, with total dedicated capital rising from $547 billion at year-end 2023 to a record $688 billion at the end of June 2026. During this time, traditional capital increased by 23% to $541 billion, while alternative capital rose by more than 37% to $147 billion.
The 9% growth in alternative capital during the first half of this year follows significant growth of 18% for full-year 2025, supported by a strong increase in non-life catastrophe bonds outstanding, favorable returns, and net inflows of capital.
Non-life alternative capital has increasingly started to penetrate additional lines of business such as casualty, beyond the market’s traditional focus on natural catastrophe risk. The catastrophe bond and related ILS market report shows that issuance in the first half of 2026 set a new record of almost $18 billion.
Related: AmCoastal secures $25.5M cat bond coverage
The outstanding market size at the end of June hit a new end-of-quarter high of $65.6 billion, following a record 2025 for the cat bond sector, suggesting investor appetite remains strong amid still solid returns and increased diversification within the asset class.
Continued strong profitability and capital generation in traditional reinsurance capital, as well as the continued growth in ILS during the period, were dampened by increased capital return to shareholders. Alongside capital growth, Gallagher Re’s report finds that its composite, which tracks the performance of leading global reinsurers, recorded a 19.9% return on equity for the first six months of 2026.
Michael van Wegen, Head of International, Gallagher Re Global Strategic Advisory, said, “The first half of 2026 demonstrates that the reinsurance industry remains in a position of exceptional financial strength. Reported returns remain well above the cost of equity, capital continues to grow, and the sector has built substantial resilience against future volatility.”
Van Wegen added, “The industry’s financial position remains extremely robust. Our analysis suggests the sector could absorb a $50-75 billion insured loss event, in addition to normal second-half catastrophe activity, and still earn its cost of equity for 2026.”
