Dedicated reinsurance capital is forecast to grow 6 per cent in 2026 to a record US$705 billion, against a reinsurance premium base that contracted approximately 7 per cent in the first half of the year, according to Marsh Re. The broker sets out the forecast in its 2027 Renewal Outlook, published ahead of the Rendez-Vous de Septembre alongside Global Specialties 2026 Market Update. Traditional capital grows 6.5 per cent and alternative capital 5.7 per cent on the forecast. Alternative capital reached US$123 billion in 2025, having increased more than 2.5 times since 2013, split between independent insurance-linked securities managers, reinsurance sponsored managers and direct institutional investors. Marsh Re expects reinsurers to continue outperforming. Its reinsurance composite, which measures return on equity, is forecast to show mid-teen returns through 2028, exceeding cost of equity over the three years to 2028 by an average of 6.5 percentage points. The broker attributes those returns to strong investment income and a lower share of catastrophe losses, with the reinsurance segment carrying 12 per cent of industry catastrophe losses in 2025 against 21 per cent in 2017. The outlook identifies the digital infrastructure sector as a growing exposure, with global data centre capacity tracking toward a 140 gigawatt threshold by 2030, more than 900 projects in planning and single-risk limits for large campuses reaching US$1 billion in total insured value. Marsh Re describes the class as a systemically concentrated infrastructure risk rather than a diversified commercial property opportunity. Reinsurer appetite for parametric solutions is broadening beyond hurricane and earthquake into severe convective storm, flood and wildfire, and into non-natural catastrophe covers such as data centre downtime. The broker links that shift to the protection gap in secondary perils. On cyber, the outlook says artificial intelligence is compressing attack timelines rather than creating new classes of attack, with the mean time to exploit falling from 745 days in 2020 to hours in 2026. Reinsurers made approximately US$3.4 billion on cyber quota shares between 2018 and 2025. Marsh Re also expects merger and acquisition activity to accelerate, driven by excess capital, a moderating pricing cycle and demand for differentiated underwriting, with specialty franchises, managing general agents and insurtechs holding proprietary data remaining attractive targets. Laurent Rousseau, chief executive officer of global capital and advisory, and Europe and IMEA at Marsh Re, says: "The 2027 renewal cycle is arriving with record capital, a rapidly evolving risk environment, and cedents that have more options than ever. That combination rewards reinsurers who are prepared to innovate; strong client engagement and a multi-class appetite is paramount in current market conditions. It is an ideal time in the market cycle for cedents to re-examine their reinsurance strategies."
