Alternative reinsurance capital is reinforcing current reinsurance market trends as total non-life insurance-linked securities (ILS) assets reached $135 billion at year-end 2025, a 19% increase year-on-year.
In the reinsurance broker’s latest 1st View Report for the April 2026 renewals, the CEO explained that a combination of strong Q4’25 underwriting results and low Q1’26 insured natural catastrophe losses have reinforced the conviction of underwriters who might otherwise be more cautious at this stage of a softening cycle.
“Alternative capital continues to reinforce this picture. Cat bond issuance in Q1 2026 tracked near a record first quarter, and total non-life ILS assets reached USD135 billion at year-end — up 19% year-on-year,” Wakefield said.
He continued: “Perhaps more significant for the evolution of the market is the broadening of investor appetite beyond catastrophe perils: interest in sidecar structures across casualty and non-catastrophe property lines is growing, extending third-party capital into new territory.”
Interest in sidecar structures across casualty and non-catastrophe property lines is growing rapidly across the ILS market, representing a significant shift in the space beyond traditional property-catastrophe risks.
Wakefield continued: “Coming out of January 1, our pipeline of alternative capital mandates was meaningful. Several of these transactions have now closed and the current pipeline for new deals remains robust as we continue to expand the scope of solutions we offer.
“The search for capital optimization continues under these favorable conditions: aligning the right portfolio with the right capital and creating the ideal balance of internal versus external risk finance. This is a fundamental change, and the boundaries of the possible are expanding.”
Regarding the Japan-focused April renewals, Wakefield noted that the renewals illustrated how a patiently executed portfolio strategy compounds in value over successive cycles. He highlighted that Japanese cedants entered the renewal with confidence in their previous portfolio remediations, an approach he noted was ultimately rewarded.
As well as this, cedants also achieved risk-adjusted reductions in the mid-to-high teens within their property catastrophe portfolios.
Gallagher Re also reported that Japanese property cat programmes ran loss free, which led to risk-adjusted rate decreases of between -15% and -17.5% at the April renewals, while property cat in other regions saw risk-adjusted rate decreases of between -7.5% and -25%
Reduced limits and five years without a major domestic loss event were also significant factors in the renewal outcomes, Wakefield further added.
He continued: “There was a similar outcome in casualty. Three consecutive years of disciplined underwriting improvement have now translated into measurable monetary rate reductions for those able to demonstrate the impact to their reinsurers.”
The CEO went on to note that the April 1st, 2026 renewals took place against a backdrop that would, in most cycles, have already disturbed the market’s equilibrium, with Wakefield highlighting the currently unstable geopolitical environment, a pronounced softening in primary markets, and an increasingly uncertain economic outlook.
“The fact that these forces have not materially deflected reinsurers from their current course speaks to where we are in the cycle — and underscores the opportunity that exists for cedants prepared to think strategically about what the current conditions make possible. The headline renewal outcomes were a continuation of January 1 themes, as cedants achieved material risk-adjusted rate reductions across property and specialty lines, while casualty pricing held broadly stable,” he added.
Moving forward, Wakefield also acknowledged how the ongoing conflict in the Middle East has introduced material uncertainty across the market.
However, he stressed that while it is too early to determine the overall level of insured loss from recent events, the market remains open and responsive to the needs of insureds.
Read all of our reinsurance renewals coverage here.
