Global insurance and reinsurance broking group Aon reports that competition among reinsurance companies was particularly strong in the US, as buyers of protection took advantage of favourable 1.1 renewal dynamics.
The report will reveal that cedents benefited from favourable dynamics at 1.1, aided by record levels of capital following another strong year of profitability for reinsurers, as well as a benign 2025 Atlantic hurricane season which Aon says led to competitive tension in the market.
Notably, competition was high among reinsurers in the US, with preferred risks “typically achieving healthy double-digit rate reductions at January 1,” while renewals in both Europe and Latin America also saw double-digit reductions with a few exceptions. In the Asia Pacific region, rate reductions neared 20% for non-loss impacted accounts, according to Aon.
“Buyers returning to the market will find a wide range of complementary reinsurance and capital products. Frequency covers and earnings protection are increasingly available. We are seeing growing interest in bespoke transactions such as structured solutions, loss portfolio transfers and facultative reinsurance, including hybrid treaty/facultative facilities,” said Alfonso Valera, International CEO for Reinsurance Solutions at Aon.
In the property space, Aon notes that insurers achieved significant discounts and improved terms at 1.1, with competition “more intense and widespread” than at 1.1 2025, as sellers showed greater flexibility and desire for risks that were previously outside or at the edge of their portfolios.
“An increasingly favorable facultative reinsurance market offers insurers an expanding range of flexible and complementary solutions to de-risk portfolios and support growth. We anticipate the facultative market will continue growing in 2026,” said Aon.
While Aon’s full report will delve deeper into pricing dynamics at 1.1, today’s commentary from the firm reveals further softening across the property reinsurance space, which had been expected.
At the same time, casualty reinsurance conditions at 1.1 2026 also remained favourable for buyers, supported by increased capacity and reinsurer appetite for risk, which Aon says is fuelling competition for international casualty and stability for US placements.
Aon explains that a combination of improving results, a robust underlying primary market, and attractive investment returns, meant casualty insurers were in a strong position at the renewals despite a challenging US tort environment.
“In a world in which risk and uncertainty is growing, businesses and governments look to insurers for solutions. Insurers can stay competitive and remain relevant to customers by leveraging attractively priced, diverse capital as well as revisiting their long-term strategy and product mix to support growth and optimize protection. Building best-in-class strategies – from capital deployment and talent to distribution focus and underwriting innovation – is essential for thriving in today’s attractive, yet dynamic market,” said Stephen Hofmann, Americas CEO for Reinsurance Solutions at Aon.
The broker’s report will also highlight that although cedents were “broadly comfortable” with current levels of protection at the key January renewals, many buyers are expected to explore additional solutions to protect earnings and support profitable growth initiatives in 2026.
Additionally, Aon’s report will explore capital levels in the sector, as the broker highlights that as at September 30th, 2025, it estimates global reinsurer capital hit a record $760 billion, an increase of $45 billion on the prior year, driven mostly by retained reinsurer earnings.
According to Aon, the reinsurance sector reported an average annualised return on equity of 16% for the first nine months of 2025, well in excess of the average cost of equity.
“The record-breaking industry capital position was supported by a relatively moderate Atlantic hurricane season and increased interest from third-party capital providers for insurance risk. Third-party capital reached a new high of $124B at the end of the third quarter – up $9B relative to the prior-year period. The catastrophe bond market ended the year at an all-time high with more than $24B of bonds issued across 74 sponsors and $58B in catastrophe bonds outstanding. The sidecar market also continued to grow in 2025 through new (re)insurers, new investors and new structures resulting in exciting growth,” Aon explained.
Another highlight of the report, and something Aon executives discussed recently, is that record levels of reinsurance industry capital are expected to support growth in emerging risk protection, notably the estimated $5 trillion to $10 trillion of investment in data centres by 2030, which will require huge volumes of re/insurance capacity.
“Similarly, evolving regulatory and litigation landscapes are expected to drive increased demand for liability insurance. A recent Aon study estimated that emerging risks in the casualty sector could contribute approximately $5B of reinsurance premium annually,” said the broker.
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