In an interview with Reinsurance News, Lara Mowery, Chief Commercial Officer at reinsurance broker Gallagher Re, said that while profitability may moderate, she sees no reason to expect 2026 to be anything other than a healthy environment for writing reinsurance.
We spoke with Mowery around the launch of the broker’s January 2026 reinsurance renewal report. She explained that the dynamics setting the stage for the 1.1 renewals will continue to influence reinsurer responsiveness in 2026.
“The dynamic that we saw really driving activity going into January 1 centred around the amount of capital available and the fact that reinsurers and ILS investors have seen attractive returns. And so, when capital is growing, there’s a question of, what do you do with that capital? Do you redeploy? Do you do something else? There really isn’t a lack of motivation to deploy that capital back into the reinsurance sector, because profitability is good, and your natural inclination is to then want more of that business,” she said.
Mowery noted that there is additional capital due to profitability in the sector, as well as the fact that 2025 was a reasonably moderate year from a ceded loss perspective.
She said several dynamics have contributed to the industry’s current position, pointing to 2023 as a key reference point: “If we think about the last few years, take 2023 as a measuring point for property, there were significant adjustments in the reinsurance market from January 1, 2023, in order to make a market correction to drive future profitability and attractiveness of the sector. Those changes also were a catalyst for the insurance market needing to adjust their own approach to underwriting and capital management.
“So, you’d seen prior to that pricing movements starting to respond to significant losses, really starting in 2017 if we’re talking about property, and driven by activity in the mid-teen years if we’re talking about casualty. Across the market, there was needed remediation in terms of underlying pricing, attachment points and structures of product, and also reinsurance pricing, attachment points and structures of product.
“Reinsurers can change their portfolio very quickly. So, in 2023, on the property side, when they made those major corrections, it took insurers longer to filter changes through their own portfolios. But that’s now really happening, and we’re seeing the results of both reinsurance movement and insurance movement working its way fully through the system. The rate increases that started a handful of years ago, the changes in structures, those now have also worked their way through the insurance sector dynamics.”
Mowery added that reinsurers have benefited from this shift. Looking at 2025 results, she said reinsurers have had a very attractive year, partly driven by the fact that significant large losses are down about 10% compared with the 10-year average. She also noted that insurance losses have started to correct, meaning the insurance sector is seeing improved profitability.
She continued, “The insurance sector made adjustments because of the way that losses are happening, both in property and casualty, and those adjustments are now really driving the discussions with reinsurers. Reinsurers, in the meantime, made their own adjustments, and that has created a more attractive environment for them to deploy capacity. Capital continues to grow through that timeframe primarily because of retained earnings, but also some additional interest in investment in the sector.
“Traditional capital, we’re projecting is going to be up about 8% year on year at January 1. ILS capital, or alternative capital, we’re projecting to be up about 12% year on year, and that’s really a testament to the fact that there are profitable results and continuing interest in participating in the sector.”
Mowery noted that reinsurers are likely to meet their cost of capital again in 2026, granted there are no major unexpected loss events. If you assume a typical loss year, the key question is whether reinsurers are pricing and structuring their products in a way that still delivers acceptable profitability. In her view, they are.
Although property pricing fell more than expected heading into the January 1, 2026, renewals, she said: “There’s still an expectation that the level of pricing we’re at is going to drive reasonable outcomes for reinsurers in 2026, that we’re not going to be at a point as the market dynamics play out where reinsurers are struggling to make that cost of capital.”
