Some of the world’s largest reinsurance companies boosted profitability this year after they reduced coverage to limit their risk from catastrophic events such as flooding and increased prices for their policies.
The annual return on equity, a key measure of profitability for reinsurers, rose 2 percentage points to 18 per cent this year, reinsurance broker Guy Carpenter said. The expected growth for 2025 compares with a gain of 22 per cent in 2023. Reinsurers sell insurance to insurance companies.
The latest returns extend a run of bumper profits that started in 2023 as many reinsurers cut back on the cover they offer against costly perils such as flooding and demanded higher premiums, which are ultimately passed on to customers, including governments, businesses and homeowners.