The reinsurance market has reached an equilibrium, with increased capital supply from accumulated earnings meeting higher demand for reinsurance protection from cedents. As such, margins will peak in 2024, although reinsurers should continue to produce a favorable return on equity of near 20 percent, comfortably above the cost of capital (8-10 percent).

This plateau led Fitch Ratings to recently revise its global reinsurance outlook to “neutral” from “improving.”