According to Gallagher Re, North American guarantee renewals are proceeding in an orderly manner as of January 1, 2026, characterized by a revival of interest from existing players and the emergence of new market players.
Despite lingering economic uncertainty, the market remains profitable through 2025. This stability enables cedents to optimize their plans, provided they maintain transparent standards.
Gallagher-Ray noted: “Successful placements are achieved by buyers effectively communicating their underwriting strategies through transparent conversations and detailed submission packages, as well as strong portfolio analysis.”
The update period highlights several trends shaping the surety industry landscape. These include risk-adjusted rate relief achieved by cedants with strong credit portfolio credit metrics and sound risk selection.
Reinsurers have shown a clear preference for well-performing portfolios, distinguishing them from those facing historical challenges.
Additionally, overall demand remains consistent, with some buyers opting to increase reinsurance limits. This demand is met by a surge in interest in new reinsurance and new commitments from existing reinsurance, helping to bridge any pricing gaps.
Additionally, the increase in panel syndication has allowed new entrants to gain a foothold, mitigating drastic changes in terms and conditions for buyers.
While capacity is generally abundant, reinsurance maintains a cautious stance on certain business categories, such as U.S. offshore oil and gas, which remains difficult to position.
Other categories include renewables, which have come under greater scrutiny from reinsurers after emerging industry losses at several cedants; and esoteric commercial obligations, which continue to face constraints from capacity providers.
The industry reports a sharp decline in loss frequency in 2025. However, Gallagher Re noted a slight increase in new losses from contract losses and commercial losses in the second half of the year.
Additionally, there are still some adverse developments regarding losses identified between 2021 and 2024.
Pressure to retain persists, particularly as additional restrictions are sought. However, interest rate pressures on non-loss impact plans have eased, reflecting reinsurers’ clearer differentiation between well-performing portfolios and challenged portfolios.
Nonetheless, reinsurers remain committed to appropriate rate adjustments, with year-over-year exposures increasing disproportionately to the premium base.
For placements affected by losses, renewal trends were the same as the previous year.