Best’s Market Segment Report: Reinsurance Solutions Becoming More Viable for Health Insurers

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FOR IMMEDIATE RELEASE

OLDWICK - SEPTEMBER 08, 2026 09:01 AM (EDT)
The volume of ceded U.S. health insurance premium to the reinsurance market has grown significantly over the past decade, to USD 203 billion in 2025 from USD 59 billion in 2016, representing growth of more than 300%, according to a new AM Best report.

The Best’s Market Segment Report, “Reinsurance Solutions Becoming More Viable for Health Insurers,” is part of AM Best’s look at the global reinsurance industry ahead of the Rendez-Vous de Septembre in Monte Carlo. Other reports, including AM Best’s ranking of top global reinsurance groups and in-depth looks at the insurance-linked securities, Lloyd’s, life/annuity and regional reinsurance markets, have been published in August and September.

The growth in ceded health insurance premiums has been notable over the past few years, as insurers responded to increasing medical cost volatility, expanding government-sponsored business, while seeking capital efficiency. The annual growth rate in ceded premium has been in double digits in three of the past five years, including 2024 and 2025 when ceded premiums increased by 30% or more.

“Underwriting margins across several U.S. health insurance segments have been under pressure, prompting insurers to seek additional reinsurance support to manage large claims exposure and improve capital efficiency while looking to reduce earnings volatility,” said Jennifer Asamoah, senior financial analyst, AM Best.

The rising exposure to catastrophic claims also accelerated demand for stop-loss reinsurance, with stop-loss/excess loss ceded premiums increasing by 50% year-over year to $19.6 billion in 2025. AM Best expects costs across the health care industry to continue rising, aided by the introduction of new high-cost specialty medications. The increased cost of labor and supplies and an aging population, combined with the impact of changes to Medicare Advantage and Medicaid managed care, also will likely place added pressure on providers.

“Even if rising utilization and medical cost trends were to stabilize, the use of reinsurance would most likely continue as a part of insurers’ capital management strategy, helping to support future premium growth,” said Jaime Quito, financial analyst, AM Best.

Other report takeaways include: 

• Affiliated reinsurance agreements continue to represent a substantial share of the U.S. health reinsurance market, although the percentage of ceded premiums to unaffiliated companies was 47% in 2025, the highest percentage in the past 10 years. Year-over-year growth in 2025 was more than double that of affiliated premiums.


• The largest line of total ceded health premium (i.e., affiliated and unaffiliated) in 2025 was comprehensive major medical, at USD 38 billion, closely followed by Medicare Advantage.


• After years of an upward trend in the use of captives across the health insurance industry, in 2025 premiums ceded to captives decreased by 56% to USD 5 billion from USD 11 billion in 2024.


• For Asia-Pacific health insurers, consumer demand, protection gaps and regulatory changes are driving reinsurance solutions.

To access the full copy of this market segment report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=368424. 

A video discussion of this report also is available at http://www.ambest.com/v.asp?v=ambgrhealth926.

For recent global reinsurance reports and coverage of AM Best’s “Reinsurance Market Briefing – Rendez-Vous de Septembre (Monte Carlo),” please visit the Reinsurance Information center. AM Best TV coverage of Rendez-Vous de Septembre can be seen at https://www.ambest.tv/rvs26.