The next era of facultative reinsurance has begun: Howden

Howden Re’s international and Asia-Pacific facultative reinsurance leaders, Luigi Boglione and Cynthia Cui, joined a roundtable to discuss how facultative reinsurance is evolving into a strategic lever for clients worldwide.

Key points:
Softening creates room for fac growth
APAC seeing subtler but steady expansion
Cedants seek sustainable, strategic solutions

What shifts are defining the current fac reinsurance market?

Boglione: The softening of direct rates is creating space for fac reinsurance to step in with greater focus and agility. In London, rates are easing but underwriting discipline remains firm, as reinsurers deploy capital selectively and prioritise technical execution over market share.

“The focus is shifting from simply completing transactions to providing strategic value.”

Cui: In Asia-Pacific (APAC), the shift is subtler. Many large insurers have long relied on treaty programmes, often overlooking fac solutions. Yet, as risks grow in scale and complexity, from semiconductor investments in Mainland China to manufacturing clusters in Vietnam, offshore windfarms in Taiwan and mega-infrastructure projects in Japan, fac reinsurance is proving its power as a precision tool for managing exposures beyond treaty capacity.

In APAC, fac facilities are particularly transformative, enabling domestic insurers to access global expertise while reducing administrative burden and strengthening local underwriting capability. The focus is shifting from simply completing transactions to providing strategic value. Cedants increasingly seek solutions that support sustainable, long-term growth.

How is fac reinsurance being used differently by cedants today?

Boglione: International clients use fac reinsurance to optimise retention, manage earnings volatility and complement treaty programmes. 

Cui: In many APAC markets, fac reinsurance has proven its important role as a complement to treaty capacity,  particularly for “peak risks” like industrial complexes, high-value construction and catastrophe-exposed properties. Fac placements also serve as a valuable second opinion, offering market feedback that signals whether insurers’ pricing and risk assumptions align with market reality.

Fac purchasing has become a strategic tool for navigating elevated risk environments and secondary perils. In APAC’s rapidly urbanising cities, fac helps manage accumulation and preserve solvency when typhoons, floods or earthquakes strike.

Boglione: In this shifting environment, an integrated model – pairing fac, treaty, capital markets and analytics – is valuable for clients globally. This is especially effective in developing markets, where reinsurers deploy capital and transfer knowledge, strengthening local ecosystems.

What innovations are changing how fac reinsurance is structured and delivered?

Boglione: Pairing long-standing clients with non-traditional capacity enables the development of multi-line, multi-year programmes that blend fac and alternative capital for greater resilience.

Cui: Across APAC, similar innovation is emerging in renewable energy, cyber and liability lines tied to digital and ESG growth. Fac reinsurance enables insurers to engage confidently in these sectors, matching the unique risk profiles of billion-dollar infrastructure or energy projects.

At the smaller end, SME portfolio solutions are gaining traction. Facultative only becomes efficient at scale, and portfolio approaches deliver that efficiency. In APAC, these facilities help smaller insurers grow sustainably, offering reinsurers a predictable, well-vetted stream of business. 

What role does local presence play in a market that’s increasingly digital?

Boglione: Even as technology reshapes how we transact, the human element remains critical. Local presence is central to our model. We now operate in around 30 countries, with more than 200 fac specialists, including more than 100 internationally.

“Three forces will shape the market: expanding facilities, deeper partnerships and rising competition.” 

Cui: Proximity unlocks agility. Local brokers understand regulatory shifts, cultural nuances and emerging risks, creating a one-team model aligned with clients’ operations. In APAC, this proximity is especially valuable, where diverse regulatory frameworks and business cultures demand on-the-ground expertise paired with global insight. This combination enables faster, more informed responses to rapidly evolving risks.

What factors will shape the fac market over the next few years?

Boglione: Three forces will shape the market: expanding facilities for speed, deeper partnerships for stability and rising competition on service quality beyond price. Pricing may soften, but underwriting discipline will remain tight.

At Howden, we see these shifts towards equilibrium as an opportunity to work more collaboratively across regions and disciplines. This enables us to help our clients use fac reinsurance as a catalyst for growth, shaping portfolios, managing volatility and unlocking new frontiers. This shared culture of empowerment and partnership sets us apart like no other.

Cui: The next phase will be led by those investing in people and tools to deliver innovative solutions. In APAC, fac reinsurance is becoming a strategic foundation, providing flexibility, expertise and stability to insurers navigating rapid economic growth and rising catastrophe exposure. By using fac placements to isolate volatile risks and preserve treaty capacity, regional insurers can protect results while pursuing opportunity.

Luigi Boglione is the managing director, head of international fac, and Cynthia Cui is managing director, head of Asia-Pacific fac reinsurance at Howden Re. They can be reached at: Luigi.Boglione@howdenre.com and Cynthia.Cui@howdenre.com, respectively.

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