According to a new AM Best report, the recent spike in dedicated reinsurance capital growth may prove short-lived, given expectations for depressed investment markets, continued geopolitical turmoil and a potential decline in global gross domestic product.
Dedicated reinsurance capacity in 2021 increased to $568 billion, driven by an increase of nearly 11% from traditional reinsurance capacity providers.
But AM Best’s expectation for 2022 is that total dedicated capital will slide back after a decade of year-over-year increases, driven by reductions in traditional reinsurance capital.
