Despite competitive terms, capacity in the casualty reinsurance market increased at the April 1st, 2026, reinsurance renewals, supported by both existing players and new entrants, according to Chirag Shah, Global Head of Casualty at Gallagher Re.
In reinsurance broker Gallagher Re’s latest 1st View Report, Shah noted that the casualty market at 1.4 reflected a continuation of trends observed at 1.1, with reinsurers taking a measured approach to growth. This was driven by dynamics in the original market, where carriers are maintaining a disciplined underwriting strategy and continuing to push rates to offset loss trends and prior-year development.
“Recent accident year performance remains a critical focus as results materialise, and discussions and negotiations continue to go deeper into quantifying the underwriting and claims management actions. When carriers provided detailed insight into their strategies along with technical evidence that the trajectory of their future performance has changed, reinsurers responded more favourably,” said Shah.
Gallagher Re reported that in the US, the market remained relatively stable, with rates on original business remaining positive and outpacing loss trends, and ample reinsurance capacity available.
Quota share ceding commissions were flat to up +1 point, while risk-adjusted rate changes for excess of loss programmes varied between flat to -5% for loss free, and flat to +5% for loss-impacted programmes.
“The majority of reinsurers looked to maintain their positions with several seeking growth opportunities with core clients. Clients continue to leverage multiple instruments to optimise their reinsurance strategies, with growing interest in alternative capital solutions, particularly sidecars, to complement traditional reinsurance,” explained Shah.
Internationally, the focus of 1.4 was the Japanese treaties, where reductions in US-exposed limits under global umbrella policies continued to dominate discussions. 2026 marks the third year of this strategic shift, during which Japanese cedants achieved further double-digit exposure reductions. As a result, renewal negotiations have focused on recognising this in the reinsurance spend given the flat premium nature of reinsurance contracts.
In Japan, general third-party liability programmes saw risk-adjusted rate changes for loss free programmes of +2.5% to +5%.
In Japan, Personal Accident programmes continued to soften as both new and existing capacity providers sought to protect existing shares and/or pursue growth opportunities. This dynamic has supported cedants in achieving double-digit premium reductions while also seeking full or partial restoration of infectious disease coverage.
Overall, Shah said technical arguments and competitive dynamics played a key role in shaping outcomes, with Firm Order Terms (FOTs) reflecting monetary reductions of -7.5% to -12% due to significantly reduced exposure. While views of risk-adjusted rates varied, the monetary decreases generally translated to single-digit risk-adjusted rate increases to keep pace with loss trends.
Additionally, other markets looking to support their property offerings contributed to treaties’ over-placements increasing by 10%-20%.
