Specialist reinsurance broker Willis Re predicts that there will continue to be new supply through 2026, while conditions will be relaxed and cession competition among reinsurers will become more intense.
The broker noted that reinsurance pricing has softened across almost all segments in 2025, with renewals further evident on January 1.
The company explained that low losses, increasing capacity and reinsurers’ reintroduction of previously limited total excess loss treaty capacity are all positives for protection buyers.
Willis Re also stated that real estate catastrophe capacity is sufficient in 2025 and will continue to grow.
Profitable reinsurance underwriting years in 2024 and 2025 strengthen the balance sheet, leaving more capital for deployment.
At the same time, strong market returns have attracted new capital through mergers and acquisitions (M&A) and the capitalization of new operators as well as smaller new ventures, major operators and new allocations to new and existing MGAs.
In addition, the review highlights that competition from other sources of capital has increased, particularly for retrocession exposures in the form of catastrophe bonds, with 2025 being a record year for the industry, with issuances exceeding $20 billion for the first time, pushing the liquidity market to new heights.
Willis Re said: “We expect more than $45 billion to flow into reinsurance and commercial insurance by 2025, excluding retained earnings. Some of this has been returned to shareholders, and some of the funds used for acquisitions have left the market, but the net inflow is huge.”
Discussing the disaster landscape in 2025, Willis Re expects natural disaster losses to exceed $100 billion for the sixth consecutive year. However, Willis Research Network’s 2025 Natural Catastrophes report says that all 2025 catastrophe losses are within global reinsurer budgets and will not be enough to prevent the arrival of a real estate catastrophe treaty reinsurance and retrocession buyer’s market, which is unfolding during the 1.1 renewal period.