New capital will shape 2026 renewals and beyond: Gallagher Re

The reinsurance sector is awash with capital, which is significant for US casualty business.

Key points:
New capital is flowing in
US casualty under scrutiny
More capacity, more options

The reinsurance sector is awash with capital, but how it is deployed – and in which classes – will shape the trajectory of 2026 renewals and beyond.

That is the view of Mark Braithwaite, chief commercial officer, North America, Gallagher Re, who joined the firm in July from Lockton Re. Speaking to APCIA Today after his first weeks in the role, Braithwaite offered a candid assessment of the industry’s shifting dynamics, from fresh capacity to casualty’s delicate equilibrium.

He sees a notable uptick in capital across the market, both from traditional and non-traditional sources. “It certainly feels like there has been an increase in interest,” he observed, noting that the influx is not limited to one segment.

Over the past year, new reinsurers have launched while established Lloyd’s players have expanded in Bermuda, often shifting into more proportional business lines. Names such as Canopius, Chaucer, Brit, Mereo and Oak Re are examples of this new phase. “That’s traditional reinsurance capacity backed by largely non-insurance investor capital,” Braithwaite said, but the picture extends much further.

Non-traditional capital has also returned in force. He points to a rise in investor appetite for cyber-related cat bonds, occurrence covers and industry loss warranties, alongside casualty sidecars. On the property side, innovation is growing, too, with hybrid products blending traditional structures with new “flavours”, such as cyber and property shared limit cat bonds.

“We are absolutely seeing more interest in the market, and it’s really across the board,” he explained. “It’s not specific to any one segment.” For cedants, this means greater choice – and potentially a more comfortable renewal season than the hard-fought placements of recent years.

Cautious optimism in casualty

If capital is expanding the menu, casualty is perhaps the most closely watched dish. For years, US casualty lines have been under intense scrutiny due to social inflation, adverse development from prior accident years and uncertainty stemming from fluctuating development patterns. These headwinds fuelled seven consecutive years of double-digit rate increases in US excess casualty – an unprecedented run.

“There’s an increasingly good chance we make it through 2025 without major adverse development, at least as an industry.” 

“Casualty has been in a sustained hard market,” Braithwaite said. By contrast, professional lines such as public D&O spiked dramatically in 2020–21 before falling back almost as quickly. Casualty’s path has been slower but more enduring.

Now, the mood is shifting. “I think we can either say there’s increasing optimism or decreasing pessimism,” he suggested. Recent quarters have seen fewer companies posting adverse development announcements from prior years than in calendar years 2023–24. Calendar year results, long masked by legacy issues, are beginning to look more favourable.

Braithwaite believes 2025 could mark a turning point. “With every quarter that goes by, there’s an increasingly good chance that we make it through 2025 without major adverse development, at least as an industry,” he explained. That would allow casualty industry calendar year combined ratios to dip below 100 for the first time in years.

This shift has and could continue to tempt fresh entrants into casualty, including reinsurers without exposure to legacy losses. Commercial auto, too, might benefit, with nearly a decade of hard market conditions setting the stage for a recalibration. “At some point, people are going to recognise that calendar year 2025 for casualty was good,” he said. “That changes behaviour – and appetite.”

The implications for clients are clear: more capacity, more options, and potentially stabilising terms. “The last three or four years there’s been a big dislocation, which made it challenging,” Braithwaite noted. “It’s also when you can differentiate yourself as a broker. But now, I think it will be more comfortable than it has been in prior years.”

“At some point, people are going to recognise calendar year 2025 for casualty was good. That changes behaviour – and appetite.”

A new role

For Braithwaite, these market dynamics provide the backdrop to his own transition into Gallagher Re. After two decades focused largely on casualty, cyber and professional lines, his new remit spans all North American product and practice groups . His task: to align vertically with global strategy while also driving horizontal collaboration across products.

“My initial observations are that we’re very good in most if not all of the individual products and practices, where we have experts immersed in those markets,” he said. “But my role is about two things: alignment with global strategy, and then horizontally taking best practices from one area and applying them to others.”

That cross-pollination could mean applying lessons from product lines with strong market share to newer or faster-growing segments – or borrowing growth strategies from niche areas to energise mature portfolios. “It’s about asking the right questions,” he said. “Why do we have a large market share in this area, and can we replicate that? Conversely, what can we learn from our growth in newer areas to inject more momentum elsewhere?”

For Braithwaite personally, the opportunity to broaden his focus is energising. “One of the things I’m most looking forward to is learning about areas I’ve not historically been focused on,” he said. “That’s the part of the job that feels most exciting.”

The reinsurance industry enters 2026 with a stronger capital base, more creativity in structures, and a casualty market that may finally be turning a corner. Against this backdrop, Gallagher Re aims to leverage its scale, specialism and collaborative approach to deliver value for clients.

For Braithwaite, the timing could not be better. “At the end of the day, we’re intermediaries between clients and reinsurers,” he reflected. “If the mood across the market is shifting from pessimism to cautious optimism, then our job is to help our clients successfully navigate those dynamics.”

For more news from the American Property Casualty Insurance Association (APCIA) click here.

Did you get value from this story?  Sign up to our free daily newsletters and get stories like this sent straight to your inbox.