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Press Release

Willis Re measures modest 3% decline in global reinsurance capital in the first half of 2020; COVID-19 “not a capital event”

COVID 19 Coronavirus|Climate Risk and Resilience

September 9, 2020

Willis Re’s Reinsurance Market Report tracks the capital and profitability of the global reinsurance industry.

LONDON, 9 September 2020: Total capital dedicated to the global reinsurance industry was USD 587 billion at 30 June 2020, reflecting a 3% decline since year-end 2019, according to the latest Reinsurance Market Report from Willis Re, the reinsurance business of leading global advisory, broking and solutions company Willis Towers Watson (NASDAQ: WLTW).

The half-year figure masks an approximate fall of 30% up to late-March, following the impact of COVID-19 on investment markets. That deficit was largely restored in the following months. Total capital remains 12% higher than at the end of 2018, suggesting that, based on current investment market levels, COVID-19 has not been a capital event for the industry.

Willis Re conducts a more in-depth analysis of a Subset1 of 18 reinsurers. The Subset’s combined ratio worsened from 94.9% in the first half of 2019 to 104.1%, due to COVID-19 losses which added 11.1 percentage points to combined ratios on average. However, on an underlying basis i.e. normalising COVID-19 and catastrophe losses and excluding prior year reserve development, the combined ratio improved from 100.5% to 98.6%.

While underlying underwriting performance improved, it did not improve enough to boost return on equity (RoE). While the reported RoE for the Subset companies fell to negative 0.7%, the underlying RoE also fell, from an already low 4.2% in the first half of 2019 to 2.7%. The driver was a drop in investment yield, which more than offset the improved underlying combined ratios. Whichever way one measures RoE, it remains well below the industry’s cost of capital of roughly 7-8%.

While reinsurers have so far resiliently shouldered the combined effects of COVID-19 losses and investment market volatility, underlying profitability remains challenging.”

James Kent,
Global CEO, Willis Re

James Kent, Global CEO, Willis Re, said: “This half-year analysis shows a reinsurance market understandably in a state of change. While reinsurers have so far resiliently shouldered the combined effects of COVID-19 losses and investment market volatility, underlying profitability remains challenging. Uncertainty therefore remains, particularly over the potential impact of COVID-19 on long-tail lines, which is driving reinsurers to deliver additional improvement in underwriting returns. We expect to see further reinsurance market discipline as well as continued differentiation between regions and clients based on past performance and underlying risk.”

Download the full report: The Willis Re Reinsurance Market Report is a biannual publication providing in-depth analysis of the size and performance of the reinsurance market. Analysis is based on the Willis Reinsurance Index group of companies. In 2020, the Index includes 39 companies from across the globe.

About Willis Re

One of the world's leading reinsurance brokers, Willis Re is known for its world-class analytics capabilities, which it combines with its reinsurance expertise in a seamless, integrated offering that can help clients increase the value of their businesses. Willis Re serves the risk management and risk transfer needs of a diverse, global client base that includes all of the world's top insurance and reinsurance carriers as well as national catastrophe schemes in many countries around the world. The broker's global team of experts offers services and advice that can help clients make better reinsurance decisions and negotiate optimum terms. For more information, visit

About Willis Towers Watson

Willis Towers Watson (NASDAQ:WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has over 45,000 employees serving more than 140 countries and markets. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas – the dynamic formula that drives business performance. Together, we unlock potential.


1 Subset is defined as those companies that make the relevant disclosure in relation to catastrophe losses and prior year reserve releases. The appendix of the report identifies the subset companies.

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