Alternative capital structures and analytics set to define reinsurance in 2026

It’s safe to say that after years of sharp price corrections, reinsurers are enjoying strong returns. Yet as competition intensifies and capital flows back into the sector, brokers face new tests. 

KEY POINTS:
Growth focus on large, complex clients
Alternative capital now a market staple
Competitive landscape set to intensify

Gallagher Re’s North America president Tim Driscoll believes success will hinge on data, innovation and people. Driscoll, who has spent more than two decades with the firm, assumed his new role earlier this year. “We’ve shifted our model here in North America to align an approach which is more focused on client segments,” he told APCIA Today.

Driscoll, who has spent more than two decades with the firm, assumed his new role earlier this year. “We’ve shifted our model here in North America to align an approach which is more focused on client segments. 

“Now we’re very much closely aligned with analytics and product, which brings us the ability to generate insights and processes that are valuable to clients and prospects.” 

He also highlighted the “power of Gallagher” and the strength of its collaborative culture, which he said exceeded expectations when the reinsurance business joined the group.

Looking at the market, Driscoll noted that the challenge for reinsurers was maintaining differentiation after several years of hardening. “Reinsurers are producing tremendous returns at this moment, close to 20%. With that comes supply and demand factors,” he observed. While competition is set to increase, he expects a steady trading environment heading into renewals. 

“We’re just not seeing anything of significance that’s going to dictate one or two single-focus themes,” he added.

Capital trends are also reshaping the sector. “We are seeing alternative capital, ILS, capacity; cat bond issuances are at an all-time high. It’s become a staple and mainstream to risk financing,” Driscoll said. The share of global reinsurance capacity attributed to alternative structures, once around 10%, is now approaching 15%+, reflecting a more educated market and diversification beyond catastrophe bonds into casualty sidecars.

Driscoll firmly believes opportunities for growth in Gallagher Re’s North America business are broad, and said the company was “really focused” on that large and complex segment. 

“It’s an attractive growth arena for us, particularly in the short line space where we’ve made meaningful progress in the last 24 months.” 

He also cited the middle-market segment, regional and super-regional carriers, and cross-selling across Gallagher’s wider platform, including retail, wholesale and claims operations. “We now have 17 branches, so we’ve got people on the ground that can generate opportunities in areas where maybe others don’t have a footprint,” he added.

Innovation is central to Gallagher Re’s strategy, and the firm is investing heavily in its Gallagher Re Insight platform, integrating placement, modelling, structuring and digital tools. 

“It’s a platform that offers insights in real time, creates AI-driven analytics and tailored risk insight. It creates speed, allows for more informed decisions and connects data in a way that creates innovation for our clients,” Driscoll explained. The roll-out will continue through 2026, providing brokers and clients a platform to assess, manage and monitor risk with unprecedented speed and precision.

“All these risks underpin the need for innovative solutions and strategic planning.”

Talent, however, remains a top priority. “People are our greatest asset, and while we are automating and delivering AI products, it’s still a people business,” he reflected. 

Cultural fit and a drive for excellence are key when hiring, and Gallagher Re’s programmes such as Reach, its analyst scheme, and internships, help develop “home-grown talent”, while leadership and financial fluency training equip colleagues for senior roles. Driscoll explained how the role of the broker was changing, and the requirements needed to have high-level discussions about risk “require us to up our game”.

Driscoll closed by identifying the main risks challenging the industry: climate change, inflation, labour and material costs, cyber threats and geopolitics. “All these issues underpin the need for innovative solutions, strategic planning, getting close to the clients, understanding their challenges and developing solutions that allow us to address risks as they arise,” he summarised. 

But the unknowns remain the greatest challenge. “Those are the ones we spend a lot of time thinking about. What’s the next issue that’s going to be impacting our clients?”

“We’re really excited about what’s going on here at Gallagher Re. Each month, each year, is just a better environment for us, and we’re excited about what the future holds.”

Tim Driscoll is president for North America at Gallagher Re. He can be contacted at:  tim_driscoll@gallagherre.com

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