Reinsurers' ROE Surge
Global reinsurers posted strong returns in 2025 and Aon says average ROEs will exceed cost of capital in 2026 — a rare multi-year outperformance that is loosening risk appetite across casualty lines. That extra capacity matters for pricing, underwriting appetite, and vendors pitching workflow and risk-data tools to carriers. (reinsurancene.ws)
Aon’s April renewal analysis shows global reinsurers posted roughly a 17% average ROE in 2025 and Aon projects that sector returns will once again exceed the average cost of capital through 2026 if ceded losses stay within expectations. (reinsurancene.ws) Aon’s market review records record reinsurance capital entering 2026—pegging global reinsurer capital near $785 billion at the April 1 renewal—with both traditional equity and alternative capital rising year‑over‑year. (reinsurancene.ws) That influx of capital translated into material rate relief at the 1/1/2026 renewals, where industry analyses documented sharp rate reductions across most lines and described the 2026 renewal cycle as a buyers’ market. (optalitix.com) Casualty remains the most uneven story: S&P and market briefs flagged U.S. casualty reserve strengthening of about $6 billion among leading reinsurers in 2024, and AM Best estimated the composite would need roughly an additional $16 billion of net losses to bring ROE down to its cost of capital. (theinsurer.com) Brokers and market commentators report cedants are responding by prioritizing transparent, credible portfolio data and modern reinsurance management tools—capabilities cited as differentiators when negotiating placements and pricing. (jmireports.com) Providers of exposure-management, catastrophe modelling and AI-driven underwriting tools are seeing a clearer sales window as carriers demand real‑time portfolio analytics, with recent industry coverage and vendor product pages highlighting uptake of platform-based solutions during the competitive 2026 renewal season. (willisre.com)
