A new report from Willis, a WTW business, has found that facultative reinsurance is helping insurers capitalise on growth opportunities in a rapidly softening market, enabling them to maximise capacity, expand into new geographies, and navigate an increasingly complex risk landscape.
Garret Gaughan, Global Head of Direct and Facultative at Willis, noted that while current market conditions are creating significant opportunities for growth, insurers remain mindful of the risks that could quickly emerge.
“Our research shows that facultative reinsurance is increasingly being used as a strategic tool to help insurers expand their capacity, enter new markets and manage capital efficiently. At the same time, it provides valuable flexibility as organisations navigate uncertain times,” Gaughan said.
Willis’ Facultative Reinsurance Report 2026, conducted in partnership with Coleman Parkes Research, gathered responses from 380 senior decision-makers at leading insurance companies across North America, Europe, the Middle East, APAC, and Latin America.
According to Willis, as insurers pursue growth more aggressively, many are turning to facultative reinsurance not only to secure additional capacity but also to manage the risks that come with it.
The report found that 52% of insurers identified capital management as a key reason for buying facultative reinsurance, up from 44% in 2024.
Meanwhile, 56% cited global expansion among their greatest opportunities over the next two years, up sharply from 39%, which Willis observed is a sign that a growing number of insurers are writing business overseas to drive growth.
The report also found that 52% named entering new markets and risk areas among their top strategic objectives for the next two years, up from 45% in the previous survey, while 55% cited increasing capacity as a top priority, up from 48%.
“The results confirm the trend identified in the 2024 survey that facultative insurance is no longer viewed only as a defensive position to protect against problem risks but also as a flexible tool to support business priorities such as expansion, while also managing risk and volatility,” Willis said.
The report further found that 60% of insurers expect to increase their use of facultative reinsurance over the next two years, compared with just 13% who plan to buy less.
In addition, 82% see facultative reinsurance as a key part of their strategies for managing risk, capacity, capital, and appetite, while only 22% said they use it as a last resort, down from 28% in the 2024 survey.
As Willis pointed out in the report, the world may feel like a riskier place in 2026, but increasing instability has done little to slow the softening of insurance and reinsurance markets.
An abundance of capital, combined with high profitability over the last two years, has led to a surge in available capacity in many lines of business, with even challenged risks securing double-digit rate reductions.
Taken together, the findings point to a clear shift in how insurers view facultative reinsurance, from a purely protective backstop to a core strategic lever for growth, one that will likely become even more central as insurers work to balance opportunity with risk in the years ahead.
