Christopher Gray, Divisional Director, Reinsurance at Westfield Specialty International, emphasised that reinsurers will need to be creative to succeed in 2026, offering multi-class expertise, cross-class relationships, and the ability to develop new products and tailored solutions to meet clients’ specific needs.
However, Gray sees opportunities in this competitive market. He said, “Where margin pressure forces the sale or restructure of an underwriting portfolio, a creative reinsurer can see opportunities to deliver RITC solutions, Loss Portfolio Transfer opportunities, or ADC (Adverse Development Cover.)
“So, creative is my 2026 reinsurance buzz word. Reinsurers will need to be smart thinkers to succeed in 2026.”
He emphasised that reinsurers will have to start really listening to exactly what the client wants to purchase and consider providing a solution to that rather than delivering a standardised, commodity product.
“To succeed in this complex and challenging environment, reinsurance needs to prove its value. Clients will retain more risk if they don’t see a value in what they are buying. Let’s work hard to deliver that value as we head towards a challenging but exciting year ahead,” said Gray.
He also stressed that reinsurers will need to maintain their underwriting discipline to succeed in 2026. Gray noted that rate adequacy has broadly been maintained overall, but margins are still under pressure, particularly in the area of property catastrophe.
He highlighted additional challenges: “Further pressure is being heaped on reinsurers by the external economic environment, which offers the twin perils of low-growth economics in many countries, coupled with high inflation. This has been the case for several years now, and has become the “new normal” but its presence and impact on underwriting margin and maintaining strong reserve adequacy marks a key differentiator between this and the last soft market for reinsurance pricing.
“We have also seen some significant losses in 2025, including $45-50bn of losses from severe convective storms this year. These have offset the effect of a very benign North American hurricane season. This increases costs in a market where they cannot be recouped through rising reinsurance rates.
“At the same time, we can already see an active M&A environment within insurance, which is normal for this part of the cycle. This does bring further reinsurance capacity pressure. Put simply mergers and acquisitions reduce the reinsurance client base for us reinsurers.”
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