Gallagher Re now expects full-year ROE of 16.5% to 17.5%.
Global reinsurers are on track to deliver stronger returns in 2026 after the Gallagher Reinsurance Composite posted a 19.9% return on equity (ROE) in the first half, its second-highest half-year result in the past decade.
Gallagher Re now expects the composite to report a 16.5% to 17.5% ROE for the full year, up from its previous estimate of 14% to 15% and well above the industry’s implied cost of equity.
The strong performance is expected to bring cumulative excess profits above the cost of equity to $13b for the 2017-2026 period, including years when the reinsurance market was soft.
Global dedicated reinsurance capital rose 5% in the first half of 2026 to a record $688b. Traditional reinsurance capital increased 4% to $541b, although strong earnings were partly offset by higher returns of capital to shareholders.
Following stronger-than-expected growth, Gallagher Re expects traditional reinsurance capital to increase 6% for the full year.
Alternative capital continued to grow faster, with non-life alternative capital rising 9% in the first half to $147b. Growth was supported by favourable returns, net inflows and continued expansion of the catastrophe bond market.
Alternative capital is also beginning to expand into other areas, including casualty risks, as investors look beyond the property catastrophe business.