Successful placements were achieved by buyers who effectively communicated their underwriting strategies via transparent dialogue and detailed submission packages with strong portfolio analytics.
This resulted in risk-adjusted rate relief for cedants who continued to demonstrate sound risk selection coupled with strong portfolio credit metrics, enabling them to capitalize on market opportunities when presented. Increased panel syndication allowed new markets to gain traction and mitigated terms and conditions changes for cedants and expanded wider corporate relationships into surety.
- Overall demand remained consistent, with select cedants (who previously refrained) electing to increase the amount of reinsurance limit purchased. This was supplemented by expanded interest from new reinsurers, as well as renewed engagement from existing markets, due to improved market sentiment and strong underlying primary results. This helped bridge gaps if incumbents' views on renewal terms differed.
- Across the market reinsurance, capacity remained sufficient with increased interest from new and existing reinsurers. Nevertheless, reinsurers remained reticent to support certain classes of business, such as offshore US Oil & Gas, esoteric commercial surety obligations. During the second half of 2025, reinsurers placed increased scrutiny on renewable energy risks following an emerging industry loss across multiple cedants.
- While the overall surety market remained extremely profitable in 2025, adverse development remained on select 2021-2024 discovered losses. Despite initial concerns with economic uncertainty, loss frequency declined sharply in 2025, although the second half of the year witnessed an uptick in new loss emergence (both contract and commercial), whose outcomes remained uncertain heading into 2026.
- Pressure on retentions persisted, especially where additional limit was sought. However, rate pressure on non-loss impacted programs was less pronounced, as reinsurers differentiated more clearly between well-performing and challenged portfolios. That said, reinsurers still sought appropriate rate adjustments where YOY exposure increased disproportionately to premium bases. Renewal dynamics for loss-affected placements were essentially unchanged YOY.
- Market indicators continue to be favorable, providing carriers an opportunity to refine and optimize programs in support of their specific capital needs and earnings goals.