Global professional services firm Aon has revealed that insurers secured double-digit pricing reductions and improved terms and conditions on their property catastrophe reinsurance placements during the June 1 and July 1, 2026, renewals, as record levels of reinsurance capital created greater flexibility for cedants seeking more tailored reinsurance solutions.
According to Aon’s Reinsurance Market Dynamics Midyear 2026 Renewal Report, global reinsurance capital reached a record $790 billion as of March 31, 2026, driven primarily by continued growth in alternative capital, a trend that we and our sister publication, Artemis, have covered extensively.
“Capacity was plentiful and more than adequate to meet increased demand, particularly in the U.S., while insurers in Latin America and Australia/New Zealand also benefited from fewer constraints and ample capacity for placements,” Aon’s new report explained.
As per the report, global reinsurance demand increased by more than 10%, driven by expanded reinsurer product offerings and a stronger appetite among U.S. insurers to purchase additional protection at the top of their programmes.
Consistent with other recent market studies, Aon observed that current conditions are prompting insurers and reinsurers to place greater emphasis on cycle management, innovation and M&A activity.
At the same time, insurers are said to be generally maintaining core retentions while selectively exploring buy-down structures and frequency covers as they seek to optimise reinsurance protection.
The firm’s report continued, “The midyear renewals also demonstrated a continued shift towards more customised and creative reinsurance solutions.
“Investments in data quality, analytics and artificial intelligence are helping expand capacity, strengthen reinsurer confidence and support better outcomes for insurers.
“Reinsurers were also more open to flexible structures and expanded products – including aggregate covers and earnings protection – while Aon continued to innovate with high-efficiency frequency catastrophe covers.”
George Attard, chief strategy officer, Reinsurance, Aon, commented, “A stable, well-capitalised and competitive reinsurance market provides insurers with an opportunity to align capital more closely with their risk strategies while using analytics and insight to support long-term growth.”
Alfonso Valera, international CEO, Reinsurance, Aon, said, “As the industry navigates geopolitical uncertainty, evolving exposures and shifting market cycles, insurers will need to remain agile as they assess emerging risks and opportunities across regions and lines of business.
“The ability to adapt to changing conditions while maintaining strategic focus will be increasingly important in the years ahead.”
Steve Hofmann, Americas CEO, Reinsurance, Aon, noted, “Cycle management is becoming an increasingly important strategic priority for insurers as they balance pricing discipline with sustainable growth.
“Leading firms are evaluating a broader range of capital solutions to reduce earnings volatility, improve capital efficiency and support growth, including facultative solutions, proportional reinsurance, multi-year arrangements and legacy transactions.”
Elsewhere, Aon’s renewals report underlined that reinsurers’ underwriting results have remained strong, with an average Q1 return on equity of 14.1%, well above the average cost of equity.
“With a strong El Niño weather pattern expected to suppress Atlantic hurricane activity in 2026, most reinsurers are well placed to comfortably exceed their cost of capital this year,” the firm added.
Looking forward, Aon has suggested that if loss activity remains within expectations through the remainder of the year, reinsurers should provide greater flexibility in structures, coverage and retentions heading into 2027.
The firm continued, “For insurers, better data, analytics and AI-enabled insight are creating new opportunities for more efficient, customised solutions and help organisations make better decisions across complex market cycles.”
