Luxembourg's reinsurance sector posted a surprise decline in 2025, with premiums falling to €13.3 billion from €15 billion a year earlier, according to the ACA's annual key figures report. The retreat reverses a 27% surge recorded in the association's 2024 edition.
The drop is striking for a market built on consistency. Luxembourg is the European Union's largest captive reinsurance domicile, home to roughly 200 licensed entities, most of them captives serving multinational parent groups.
PwC Luxembourg has noted the country established its own reinsurance prudential framework as early as 1991 - more than a decade before the EU caught up with its 2005 directive - and remains one of only three member states with a standalone insurance regulator.
Life reinsurance made up the largest share of premiums at 52.1%, a dominance that reflects Luxembourg's broader role as the eurozone's leading center for cross-border life insurance distribution, as highlighted by Luxembourg for Finance, the country's financial promotion agency.
Property and casualty proportional reinsurance accounted for 34.8%, with non-proportional P&C business at 13.1%. The ACA noted the market remains concentrated, driven by a limited number of players.
Within proportional business, motor vehicle liability led at 37.4%, followed by fire and property damage at 33.5% and general liability at 12.6%. Medical expense, other lines, and marine, aviation and transport made up the balance.
Non-proportional reinsurance tilted heavily toward property at 55.7%, with casualty at 30.4%, a split the ACA said reflects growing demand for catastrophe protection. Life outweighed health 68.5% to 31.5%.
Great Britain and the United Kingdom were the largest source of premiums at €3.8 billion, trailed by Germany at €2.2 billion, France at €1.6 billion, Gibraltar at €1 billion and Guernsey at €0.7 billion. The Netherlands posted €0.5 billion, Ireland and Spain each recorded €0.4 billion, while Italy came in at €0.3 billion and Bermuda at €0.2 billion.
Post-Brexit restructuring has been a tailwind for the market in recent years. Non-life insurer balance sheets in Luxembourg grew fivefold between 2015 and 2024, Paperjam has reported, fueled in part by portfolio transfers from the United Kingdom.
Fortune Business Insights estimates the wider European reinsurance market at $230.22 billion in 2025, placing Luxembourg as a small but significant player for a country of fewer than 700,000 people.
The ACA said the overall premium distribution reflects a continued focus on stability across core business lines and resilience against large-scale losses.
