Who dares wins: capturing the insurance market’s rare window of opportunity

There is a paradox at the heart of today’s insurance markets. Despite headlines around softening prices, margin squeeze and capital volatility, underwriting profits remain resilient and capital continues to flow.

Key points:
A rare window of opportunity
Industry fundamentals remain strong
Integrate capital with strategy

In a recent roundtable, Leo Beckham, head of UK & Europe, Howden Capital Markets & Advisory, Sébastien Bamsey, managing director, Howden Capital Markets & Advisory, David Flandro, head of industry analysis and strategic advisory, Howden Re and Alexander Roth, head of capital & operational solutions international, Howden Re, discussed why they believe the industry is entering a rare window of opportunity for those positioned to seize it.

Stronger under the surface

The market’s caution is understandable: concerns over softening pricing, margin pressure and volatility persist with inflation exposing weaker underwriters and increasing the risk of policy mis-steps.

However, industry fundamentals remain strong. Loss ratios are low, returns on capital attractive and profitability has been sustained for three consecutive years.

“Looking to 2026, intermediaries must add value in matching supply with demand: with innovation, underwriting discipline and capital efficiency, this environment offers a real opportunity for upside.” 

“If we cast our minds back to 2007–10, there are clear parallels as strong returns can be achieved despite uncertainty,” said Flandro. “While growth between 2021 and 2024 was driven by pricing tailwinds, the market has since fragmented into many micro-markets. Some segments are still experiencing rate rises while others face pressure; pricing alone is no longer enough to drive growth.” 

Flandro continued: “In 2025 and looking to 2026, intermediaries must add value in matching supply with demand: with innovation, underwriting discipline and capital efficiency, this environment offers a real opportunity for upside.” 

The underwriting landscape

According to Roth, “the oft-repeated narrative of a pricing collapse exaggerates the truth.” In reinsurance, the nat cat environment still supports favourable attachment points and pricing, while in casualty, the market is following a normal liability cycle, rather than a reserve collapse. “That said, underwriting margins will inevitably compress, and in this transition, demand for legacy, retrospective and earnings-stabilisation solutions is rising,” Flandro added. 

A few more shifts are key. The hard market that emerged after 2019 brought new entrants, but capital inflows have been more restrained than in prior cycles, particularly after the 2022 interest rate shock. This relative shortage of fresh supply has underpinned firmer pricing. At the same time, risk-transfer tools once associated with larger carriers, such as catastrophe bonds and other ILS placements, are being adopted more widely. 

The result of these changes is that the underwriting market has better tools to manage volatility, capital stress and cyclical transitions.

Structuring and transaction opportunities

If underwriting is the engine, structuring is the fine-tuning that makes the difference in tight markets. According to Roth: “Today, clients no longer ask, ‘which product?’ but, ‘which solutions best support our strategy?’ They want partners who understand their capital and/or operational constraints, risk appetite and return expectations, not just off-the-shelf products.” 

Roth highlighted the importance of viewing capital and strategy through an integrated lens, recognising that all areas, from structured reinsurance to investment management, can be addressed through different solutions, yet all influence one another. 

In Europe, and increasingly in Germany, retrospective reinsurance structures have been placed to stabilise earnings or give capital relief. 

Mechanisms that release reserve profits or reduce ceded margins are gaining traction. In parallel, asset strategies optimise market-risk charges and capital efficiency, strengthening both sides of the balance sheet.

Roth concluded, “In softening cycles where organic growth decelerates, structuring and capital optimisation become the differentiator.”

M&A poised for the next wave

Bamsey highlighted that, from a capital markets perspective, profitability continues to support strong valuations. “Carriers typically transact on a multiple of book value, while capital-light models are measured with earnings-based multiples, commanding a premium for underwriting track record, capacity diversity and tech differentiation,” he said, adding that hybrid models using third-party capital can secure higher valuations and greater exit flexibility.

“The ‘Class of 2020’ private equity investments in Lloyd’s (incl. Apollo and Inigo, which have both recently been acquired by strategic carriers) are now approaching maturity. Softening market conditions are likely to trigger consolidation as larger carriers pursue growth and diversification,” added Beckham. 

Investor appetite is strengthening. Private equity is focused on capital-light and service models with defined exit paths, while private credit investors are chasing diversification and complexity premiums. Whole account and casualty sidecars are also attracting interest, given their defined tenor and collateral yield.

Markets mature, cycles invert and opportunities fade. But now, underwriters can still access both growth and margin, and strategic deal architects can amplify that edge. The roundtable participants agreed that success now depends on acting with conviction, rather than waiting for ideal conditions.

Leo Beckham is head of UK & Europe, Howden Capital Markets & Advisory, Sébastien Bamsey is managing director, Howden Capital Markets & Advisory, David Flandro is head of industry analysis & strategic advisory, Howden Re and Alexander Roth is head of capital and operational solutions international, Howden Re. They can be contacted at  leo.beckham@howdencma.com, sebastien.bamsey@howdencma.com, david.flandro@howdenre.com. alexander.roth@howdenre.com respectively.

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