Abundant Reinsurance Capacity Favours Buyers of Credit in 2027

Insurance News Desk: Abundant reinsurance capacity is expected to give buyers of credit, surety and political risk cover stronger negotiating power at the 1 January 2027 renewals, according to analysis from Willis Re. Record levels of reinsurance capital combined with generally profitable underlying results have created conditions that favour cedents seeking protection in these specialised lines.

Willis Re notes that reinsurers are likely to differentiate more carefully between individual programmes as competitive pressures build in the soft market. Strong support is anticipated for most accounts, with meaningful price increases expected mainly on those that have suffered losses. The London market in particular has seen additional capacity enter the space, supported by solid growth in Lloyd’s credit premiums during 2025 and the ongoing effects of regulatory changes such as Basel 3.1.

At the same time the broker highlights emerging aggregation risks that underwriters are watching closely. The rapid expansion of data centres linked to the artificial intelligence boom has created new concentrations of exposure that can cut across traditional credit, surety and political risk covers.

A single large project may generate credit risk through financing arrangements, surety exposure through contractors and additional property or cyber risks, leading to larger overall losses than any individual treaty might suggest.

Despite these concerns the overall market tone remains constructive for buyers. Cedents with clean loss records and transparent risk information are expected to secure favourable terms and pricing as capacity providers compete for quality business.

The findings reflect a broader soft market environment in which excess supply continues to outpace demand growth across many specialty classes heading into the year-end renewals.