COVID-19-related capital raising by global (re)insurers has picked up again as the year-end approaches with an estimated $6bn raised thus far in the fourth quarter of the year.
According to a new report from Willis Re, this takes the year-to-date tally for capital raising to a total of $19bn with a further $3bn being contemplated and/or in progress.
The broking reinsurance arm of Willis Towers Watson noted that recent capital raises have been largely motivated by the strengthening pricing environment, particularly for reinsurance and commercial insurance lines of business.
At the same time, required balance sheet bolstering due to COVID-19 loss exposure continued during the quarter.
“Looking ahead we may see further required capital raises as pending legal rulings on COVID-19 related claims are reached. Capital raising is likely to remain a high-profile topic but, for context, global reinsurers returned to shareholders three times more than they raised in the first half of 2020 as we noted in our half-year 2020 reinsurance market report,” said Willis Re.