Gallagher Re urges buyers to use soft market to reshape programmes

Gallagher Re has urged cedants to use the current softening market to secure longer-term structural benefits rather than focus only on rate reductions, as record capital levels give buyers greater choice.

Speaking at the broker’s pre-Monte Carlo RVS briefing, Gallagher Re global CEO Tom Wakefield (pictured), said: “Rate savings alone are the least strategic outcome available.

“Instead, they will come from using today’s market to improve capital efficiency, reduce volatility, strengthen balance sheets, and secure structural advantages that continue to create value long after the market eventually normalises,” Wakefield said.

Dedicated reinsurance capital reached a new high of almost $688bn at mid-year, up 5% during the first six months of 2026, Gallagher Re said. Non-life alternative capital grew 9% to almost $147bn, while its reinsurer composite delivered a 19.9% first-half return on equity.

Gallagher Re president Andrew Newman said capital supply continued to outpace demand, but argued that the more important question was how that capital was being deployed.

“Clients are increasingly less concerned with where capital originates and more concerned with what that capital can do,” Newman said.

“The market conversation has moved from access to capital to optimisation of capital.”

Capital optimisation

Head of global clients Will Thompson, referring to the largest ceding insurers, said clients now had access to “a broader capital toolkit than at any point in our industry’s history”, with traditional reinsurance sitting alongside cat bonds, sidecars, collateralised reinsurance and bespoke capital arrangements.

He said alternative capital was no longer being treated as a separate market, with buyers increasingly assessing different sources of capital together.

“The instinct in a soft market is often to buy less protection in order to increase retained earnings, manufacture top-line growth, and improve near-term financial results,” Thompson said.

“However, when external risk capital is available on particularly attractive terms, reducing volatility and transferring additional risk may create greater, longer-term value than retaining it,” he continued

Keith Lippman, global head of property, said property buyers were entering renewals from their strongest negotiating position in more than a decade, with abundant capacity and subdued 2026 catastrophe activity supporting competition.

Many buyers were now asking whether the programme they were renewing was the one they would design if starting from scratch.

“The property conversation has shifted from buying capacity to designing the optimal programme,” Lippman said.

He added that alternative capital was helping reopen discussions around aggregate covers and bespoke views of risk, while clients were increasingly focused on volatility management and earnings protection rather than simply catastrophe protection.

A strategic window

Hamish Dowlen, EMEA CEO, said clients were approaching renewals with clearer objectives around growth, earnings resilience, capital efficiency and long-term programme design.

“The opportunity being created by this market is not simply cheaper reinsurance. It’s the ability to make more deliberate choices about how risk is financed,” Dowlen said.

Asked whether softer conditions risked triggering a “race to the bottom”, Wakefield rejected a simple year-on-year price comparison, arguing clients were increasingly reshaping what they bought and accessing different forms of capital.

Newman added in response that some of the structural changes imposed during the 2023 property correction may now rebalance, while warning against assuming buyers would simply push risk back to reinsurers.

“Do I think that the push by the reinsurance market to pass risk across the table to primary companies in 2023 might have gone too far? Yeah, I think it probably might have gone too far,” he said.

“Do I think there’ll be a rebalancing of that? Yes. I think most of that is going to come from restructuring rather than repricing,” he added.