The growth of alternative capital is giving buyers more flexibility to build diversified reinsurance programmes, with cedents increasingly seeking partners able to access both traditional and alternative sources of capacity, Guy Carpenter’s Jennifer Paretchan recently told Reinsurance News.
Speaking following the release of the firm’s July 2026 reinsurance renewal report, Paretchan noted the expansion of dedicated alternative reinsurance capital had become one of the defining themes of the mid-year renewals.
According to the executive, this development has been building gradually over a number of years, but at 1.7, it “finally manifested” in a meaningful way.
Paretchan continued, “What that means for buyers is an opportunity to supplement their traditional programs with other sources and create a more diversified suite of capital when they’re thinking about reinsurance.
“I think that’s a great development for clients. In practice, this means they can build traditional occurrence limit, if we’re talking about property, and now supplement with frequency or aggregate protection.”
Guy Carpenter, the global risk and reinsurance specialist and a business of Marsh, suggested in its report that abundant capacity and growing reinsurer appetite kept the global property reinsurance market competitive at the mid-year renewals, with attractive terms and coverage options encouraging buyers to explore supplemental solutions to complement traditional catastrophe programmes.
With this in mind, Paretchan told Reinsurance News that one of the most important things for reinsurers to consider is taking a client-focused approach.
She added, “They want to grow, and with this excess capital, they want to deploy it in support of clients. Reinsurance conditions, especially from a property and specialty perspective, have been softer than, say, the casualty market.
“Taking a more client-centric approach, where reinsurers are looking across all the placements a buyer is purchasing, enables them to utilise their capital more effectively. It creates a more holistic way for them to deploy capital and grow.
“In addition, many of these traditional capital sources also have alternative capital capabilities at their fingertips.
“So you have these dual-track options, and clients like being able to partner with a reinsurer that can access both traditional and alternative capital from a single trading relationship. I think that’s really important.”
Adding more on the role that alternative capital is playing in today’s market, Paretchan observed that, given healthy returns in the space in recent years, catastrophe bonds have become more attractive to buyers.
“Pricing and terms have been much more favourable, and through the year-to-date, over $60 billion of outstanding limit for catastrophe bonds has been realised, which is a record level,” she said.
Parametrics are also emerging as a stronger solution amid the prevalence of severe convective storms, which have challenged clients because of the frequency of lower-severity events.
Paretchan said that this form of protection has been around for a long time, mostly focused on hurricanes and earthquakes because those were more modelable.
But with better modelling and better analytics, there’s now more comfort around what we would call secondary perils, severe convective storms, wildfire, and flood.
Paretchan went on, “We’ve talked over the last year about the need for buyers to achieve aggregate solutions, and parametrics are starting to fill that space in a bespoke way, whether region-specific or peril-specific. It’s meeting a real need in the market.
“We’re in an interesting market where ample capital is meeting cedent property needs in a better way. These solutions give both carriers and reinsurers the ability to grow and execute their business plans.”
Dean Klisura, President & CEO, Guy Carpenter, echoed this sentiment in the report, stating, “In the current market conditions, cedents have secured competitive pricing and terms on their reinsurance programs, but many are also exploring alternative options, such as parametric solutions and sidecars, as ways to complement their traditional protection. We expect this trend to continue as we move through the remainder of the year.”
Closing the interview, we asked Paretchan about her general outlook for the global reinsurance market as we head into the second half of the year.
She said, “I think if we stay on the property theme for a second, the first thing that comes to mind is the outlook for the 2026 Atlantic hurricane season. The forecast is for a strong El Niño, which would typically point to below-average activity.
“That said, there are two key things to watch. One is whether El Niño forms later than expected, which could mean more activity than currently anticipated.
“The other is sea surface temperatures; if they remain warmer than normal, that could also be more conducive to hurricanes. I don’t think we can be too comfortable; we need to keep an eye on conditions that could shift the outlook.”
Paretchan said Guy Carpenter’s analysis of the correlation between early outlooks and actual outcomes shows a 0.44 correlation between the June outlook and actual activity over the past 10 years, rising to about 0.8 for the in-season August outlook. She said confidence in the integrity of forecasts grows as the season draws closer, providing more reassurance heading into it.
Paretchan concluded, “If the season does come in below average, we would likely continue to see excess supply and competitive market conditions. But it remains a market that supports a multifaceted approach to reinsurance protection.
“From a casualty perspective, underlying rate dynamics are the key driver of renewals and carriers have been disciplined.
“We’ve now seen seven consecutive quarters of rate increases in general casualty, and in financial lines, US public D&O has finally moved into positive rate change territory in Q1, which is an important inflexion point for reinsurance renewals.
“The key to the late 2026 and 2027 casualty renewals remains being fierce advocates for our clients – showcasing the limit discipline, risk selection and other claims, actuarial and underwriting measures.
“Overall, heading into the fall, the market remains highly disciplined, but reinsurers are taking a holistic, client-centric approach. So the outlook is one that’s positive with opportunity for both sellers and buyers.”
Based in New York, Paretchan is responsible for Guy Carpenter’s strategic trading relationships, broader market trends, and reinsurance market distribution strategy. She also serves as a client Account Executive focused on Casualty and Financial Lines business.
She has over 25 years of industry experience and has worked across Guy Carpenter’s New York, London, Toronto, and Philadelphia offices.
