Catastrophe reinsurance capacity is becoming cheaper and more abundant, yet hundreds of billions of dollars in exposure still goes uninsured each year. The contrast shows how much capital sits behind the insurance market compared with the amount of protection businesses and households eventually buy.
Insurance covered less than half of global catastrophe losses in every year between 2015 and 2025, according to a new Moody’s analysis.
Across the full period, 57.8% of catastrophe losses remained uninsured, even as conditions in the reinsurance market became increasingly favorable for cedents.
Global reinsurer capital reached a record $785 bn at the end of 2025, around 10% higher than a year earlier, according to Aon estimates. Pricing softened again during the July 2026 renewals as growing capacity increased competition among reinsurers.
Guy Carpenter’s global property catastrophe rate-on-line index moved from a 12% decline at the January 1 renewals to a 16% decline by mid-year. The shift gave insurers more room to negotiate pricing and structure protection around their catastrophe portfolios.
Some cedents are using the softer market for more than lower rates.
Guy Carpenter said insurers are considering parametric structures and sidecars alongside traditional reinsurance, while additional capacity is supporting wider coverage options across catastrophe programs.
Moody’s found the protection gap remains largest for risks capable of producing severe losses across large groups of policyholders at the same time. Earthquake exposure in the US offers one of the clearest examples, with about 84% remaining uninsured because coverage is often optional, expensive and purchased by relatively few property owners.
More reinsurance capital doesn’t automatically translate into affordable primary insurance. Insurers still need catastrophe pricing sufficient to fund claims, regulatory capital and required returns, while reinsurers face comparable economics when accepting concentrated exposures.
Where those economics remain difficult, additional capacity higher in the insurance chain does little to solve weak demand or affordability at household and business level.
The result is a persistent gap even when reinsurers have ample capital available and competition pushes pricing lower.
The scale becomes more visible under a severe catastrophe scenario. Moody’s estimates a one-in-200-year aggregate US catastrophe event would produce more than $400 bn of insured losses against more than $1.1 tn of total losses to insurable property, leaving roughly $700 bn uninsured.
A loss of that size would be substantial relative to capital held inside the insurance sector. It is far smaller when compared with the pool of capital available across global financial markets, where bonds and equities totaled about $319 tn at the end of 2025.
That difference is drawing more external investment capital toward insurance-linked risk. As reinsurance capacity grows and catastrophe pricing softens, the remaining challenge is less about the total amount of capital available and more about how much protection reaches exposed properties at an economically workable price.
