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Reinsurers generated returns well above the cost of capital in 2024 due to positive underwriting results, driven by repricing and portfolio de-risking, according to a new AM Best report.
Principal Takeaways:
Reinsurers met their cost of capital for the first time in four years, thanks to a rebound in capital gains and underwriting profits.
High interest rates, equity market volatility, and economic uncertainty resulted in another increase in the cost of capital.
Reinsurers that balance long-term strategies with effective tactical decisions and sound risk management can still meet or exceed return expectations.
