Pricing has broadly softened across most lines, with stronger risks achieving favourable outcomes due to credible data and active risk management.
The market is expected to be shaped by a combination of opportunities and challenges, requiring strategic engagement and the ability to interpret market signals effectively. Facultative reinsurance will remain a vital tool for managing complex exposures and balancing reinsurer portfolios, with intermediaries playing a critical role in navigating this evolving landscape.
Looking ahead, the next two years are expected to be shaped by three key forces
- Capital abundance with selective discipline: Capacity will remain strong, though reinsurers will continue to manage volatility carefully, particularly in higher‑hazard classes and long‑tail exposures.
- Structural shifts in distribution: Facilities, delegated mechanisms and data‑driven underwriting platforms will play a growing role in how facultative capacity is deployed and accessed.
- Regional differentiation: Asia, the Middle East and Latin America and the Caribbean will remain highly competitive; the US market will also soften, albeit with greater caution; and London will continue to face pressure from both local and global capacity. These differences are minor rather than meaningful, reflecting the fact that the market will remain broadly soft.
This report provides an overview of current conditions and a forward-looking perspective on how the facultative market is likely to evolve through 2026 and beyond.