Christopher Gray, director of reinsurance at Westfield Specialty International, stressed that reinsurers will need to be creative to succeed in 2026, offering multi-category expertise, cross-category relationships and the ability to develop new products and customized solutions to meet clients’ specific needs.
Gray stressed that currently too many reinsurers are chasing too few buyers, leading to lower interest rates and overall market weakness. Therefore, he expects overcapacity to remain the dominant factor affecting the reinsurance market in 2026.
However, Gray sees opportunity in this competitive market. “When margin pressures force underwriting portfolio sales or restructuring, creative reinsurers can see opportunities to offer RITC solutions, loss portfolio transfer opportunities or ADC (adverse development coverage),” he said.
“Creativity is therefore my reinsurance buzzword for 2026. Reinsurers will need to be smart thinkers to succeed in 2026.”
He stressed that reinsurers must start to truly listen to what customers want to buy and consider offering solutions rather than offering standardized commodity products.
“To succeed in this complex and challenging environment, reinsurance needs to prove its value. If customers don’t see value in the products they buy, they will retain more risk. Let’s work to deliver that value as we head into a challenging but exciting year ahead,” said Gray.
He also stressed that reinsurers need to maintain their underwriting discipline to succeed in 2026. Gray noted that overall, rate adequacy has been largely maintained, but margins remain under pressure, particularly in the property catastrophe space.
He highlighted other challenges: “The external economic environment has put further pressure on reinsurance companies, which poses the twin dangers of low economic growth and high inflation in many countries. This situation has persisted for several years and has become the ‘new normal’, but its existence and its impact on underwriting margins and maintaining strong reserve adequacy marks a key difference between this market and the previous market where reinsurance pricing was weak.”
“We also see some significant losses in 2025, including $45-50 billion in losses from severe convective storms this year. These losses offset the impact of a very mild North American hurricane season. This adds costs to the market that cannot be recouped through higher reinsurance rates.
“At the same time, we can already see an active merger and acquisition environment within the insurance industry, which is normal for this part of the cycle. This does bring further pressure on reinsurance capacity. Simply put, mergers and acquisitions reduce the reinsurance customer base of our reinsurers.”
