Up to $40B of additional reinsurance limit bought in H1: Guy Carpenter

Guy Carpenter & Co. LLC, the reinsurance brokerage of Marsh LLC, Tuesday estimated that approximately $35 billion to $40 billion of additional reinsurance limit has been purchased worldwide, based on a review of buying activity from January through July 2024.

This represents 5% to 10% of total catastrophe capacity purchased, including catastrophe bonds, Guy Carpenter said.

More than half of the increased limit originated in North America across a “wide range” of businesses and more than 60% of property catastrophe contracts included expanded limit.

Traditional reinsurer capital increased by more than $35 billion at year-end 2023 over year-end 2022, the reinsurance broker said.

First-half 2024 was also a record for issuance of catastrophe bonds “as investors sought opportunities to participate in improved market conditions,” Guy Carpenter said, without providing exact figures.

Demand is forecast to remain “somewhat elevated” in 2025 “provided pricing and capacity remain in balance,” Guy Carpenter said.

Among the key factors affecting buying decisions into 2025 will be continued — though smaller — increases in property valuations and growth in overall exposure.