The January 1, 2026, North American Surety renewals proceeded in an orderly manner, marked by renewed appetite from incumbents and the emergence of new market players, according to Gallagher Re.
Despite lingering economic uncertainties, the market remained profitable through 2025. This stability allowed cedants to optimise their programs, provided they maintain transparent standards.
“Successful placements were achieved by buyers who effectively communicated their underwriting strategies via transparent dialogue and detailed submission packages with strong portfolio analytics,” Gallagher Re noted.
The renewal period highlights several trends shaping the surety landscape. These include the risk-adjusted rate relief achieved by cedants with strong credit portfolio credit metrics and sound risk selection.
Reinsurers showed a clear preference for well-performing portfolios, differentiating them from those with historical challenges.
Additionally, overall demand remained consistent, with some buyers choosing to increase the amount of reinsurance limits. This demand was met by a surge in interest from new reinsurance and renewed commitment from existing ones, helping to bridge any pricing gaps.
Moreover, increased panel syndication allowed new entrants to gain a foothold, which in turn mitigated drastic changes to terms and conditions for buyers.
While capacity was generally sufficient, reinsurance maintained a cautious stance in certain classes of business, such as offshore US Oil & Gas, which remained a difficult class to place.
Other classes include renewable energy, which has experienced increased scrutiny by reinsurers following an emerging industry loss across multiple cedants; and esoteric commercial obligations, which continue to face restraint from capacity providers.
The industry reported a sharp decline in loss frequency for 2025. However, Gallagher Re noted a slight uptick in new loss emergence, both contract and commercial, during the second half of the year.
In addition, some adverse development continues to linger from losses discovered between 2021 and 2024.
Pressure on retentions persisted, particularly where additional limit was sought. However, rate pressure lessened for non-loss impacted programs, reflecting a clearer distinction by reinsurers between portfolios that were performing well and those that were challenged.
Despite this, reinsurers still aimed for appropriate rate adjustments where YOY exposure increased disproportionately to premium bases.
For placements impacted by losses, the renewal trends were the same as the previous year.
