Gallagher Re: 1/7 renewals favour more creative structures

Mid-year reinsurance renewals have highlighted a shift from price-led outcomes towards more strategic and creative programme structures, according to Gallagher Re.

The reinsurance broker’s “First View” report, covering the 1 July renewals, said strong reinsurer performance and record capital levels are driving pricing improvements while supporting more efficient risk transfer solutions.

Gallagher Re said conditions increasingly favoured buyers at mid-year, with risk-adjusted rate reductions across many classes and geographies.

Cedants were also able to reshape programmes and improve long-term portfolio resilience, supported by greater reinsurer flexibility on both structure and price.

The broker said this has led to a return of more innovative approaches, including multi-line, multi-year and aggregate structures, now available at more attractive price points.

Dedicated reinsurance capital reached $648bn at year-end 2025, up 11% year on year.

Premium growth remained limited at just over 1%, widening the imbalance between supply and demand and intensifying competition.

Gallagher Re said those dynamics have continued into 2026.

Reinsurer returns also remain strong, with estimated return on equity of 14% to 15% for 2026, following a near-19% return in 2025.

The broker said this is supporting a continued willingness to deploy capacity.

Against that backdrop, cedants are increasingly using tailored solutions to manage earnings volatility and optimise capital efficiency, while using improved market conditions to enhance structure alongside rate reductions.

Property renewals provided the clearest evidence of the trend, with programmes attracting significant excess capacity and reinsurers competing on both price and terms.

Gallagher Re said property catastrophe saw the most pronounced pricing movement, with reductions of 20% to 25% or more for the best performing accounts in North America, with similar trends across other regions.

Natural catastrophe losses stood at $38bn for the first six months of 2026 as of 15 June, below the 10-year average.

Gallagher Re said reinsurers therefore enter the second half of the year with healthy catastrophe budgets and continued capacity to deploy.

Alternative capital also continued to expand, the broker observed.

Non-life ILS capital reached $135bn, while catastrophe bond issuance stood at $15.6bn by mid-June, putting 2026 on track for another record year.

Casualty outcomes were more stable, reflecting continued caution around loss trends, particularly in the US.

However, Gallagher Re said reinsurers showed increased adaptability for well-performing portfolios.

Across specialty lines, abundant capacity persists, although recent loss activity in aviation and cyber is prompting closer scrutiny of performance.

Tom Wakefield (pictured), global CEO of Gallagher Re, said: “The data shows a market defined by strong capital, healthy returns and increasing competition, all of which are improving outcomes for clients.

“Importantly, this is not only about price,” he continued.

“The same forces are enabling clients to access more tailored and efficient reinsurance solutions, often at price points that would not have been achievable in recent years.

“The focus now is on how effectively clients use these conditions to optimize their programs and build more resilient portfolios for the future,” Wakefield added.