Cedants benefited from favorable renewal dynamics at the Jan. 1, 2026 reinsurance renewals, according to Aon's Reinsurance Market Dynamics report.
Record capital levels, strong reinsurer results, and a moderate Atlantic hurricane season contributed to competitive tension in the marketplace.
Competition among reinsurers was particularly strong in the US property catastrophe market. Preferred risks typically achieved double-digit rate reductions at the January renewals.
Property renewals in Europe, Latin America, and Asia-Pacific also saw double-digit discounts for non-loss-impacted accounts, with a few exceptions. Reinsurers demonstrated flexibility and interest in risks that were previously outside or at the edge of their portfolios.
Aon estimates global reinsurer capital reached a record US$760 billion at Sept. 30, 2025, up US$45 billion from the prior-year period. The increase was driven mainly by retained earnings.
Gallagher Re's January 2026 1st View report projected total dedicated reinsurance capital to reach US$838 billion by year-end 2025, driven by about 8% growth in traditional capital to US$710 billion and roughly 12% growth in alternative capital to US$128 billion.
Total ILS issuance exceeded US$20 billion in 2025, while alternative capital participation in long-tail business roughly doubled over the past year. Gallagher Re noted that insured catastrophe losses exceeded US$120 billion for a sixth consecutive year, though limited loss flow into reinsurance reflected higher attachment points following structural changes implemented in 2023.
Third-party capital reached a new high of US$124 billion at the end of the third quarter, up US$9 billion year-over-year, according to Aon. The catastrophe bond market ended the year at an all-time high, with more than US$24 billion of bonds issued across 74 sponsors and US$59 billion in cat bonds outstanding.
In casualty, conditions remained favorable for reinsurance buyers at the January renewals. Increased capacity and reinsurer appetite for risk fueled competition for international casualty and stability for US placements.
Alfonso Valera (pictured above), international CEO for Reinsurance Solutions at Aon, said buyers returning to the market will find a range of complementary reinsurance and capital products, including frequency covers, earnings protection, and bespoke transactions.
