Insurers turn to fac to support growth: Willis

Insurers are increasingly using facultative reinsurance to support growth and international expansion as market conditions soften, according to a new Willis survey.

The “Facultative Reinsurance Report 2026”, produced with Coleman Parkes Research, surveyed 380 senior insurance decision makers across North America, Europe, the Middle East, Asia-Pacific and Latin America.

More than half of respondents, 52%, identified capital management as a key reason for buying facultative reinsurance, up from 44% in Willis’s 2024 survey.

Global expansion was cited by 56% as one of their greatest opportunities over the next two years, up from 39%.

Meanwhile, 52% named entering new markets and risk areas among their top strategic objectives, compared with 45% previously, while 55% cited increasing capacity, up from 48%.

Willis said the findings show facultative reinsurance is increasingly being used as a strategic tool rather than purely as protection for difficult risks.

Some 60% of insurers expect to increase their use of facultative reinsurance over the next two years, against 13% planning to buy less.

A further 82% said facultative cover was a key part of their approach to managing risk, capacity, capital and appetite, while only 22% viewed it as a last resort, down from 28% in 2024.

The report also highlighted growing concern about emerging risks.

Geopolitical tensions were cited by 57% of respondents, up from 52%, while concern around cyber risk rose sharply to 54% from 24%.

Climate-related risks were named by 40%, compared with 30% previously.

Garret Gaughan, global head of direct and facultative at Willis, said: “Our research shows that facultative reinsurance is increasingly being used as a strategic tool to help insurers expand their capacity, enter new markets and manage capital efficiently.

“At the same time, it provides valuable flexibility as organisations navigate uncertain times,” he added.

The report can be downloaded here.