Equity analysts at Autonomous have indicated in a recent report that, with 2025 demonstrating significant growth in overall alternative capacity, 2026 is anticipated to experience moderate acceleration in the growth of third-party reinsurance capital.The report stems from the firm’s participation and what was learned at the recent Association of Insurance and Financial Analysts (AIFA) conference, which took place earlier this week.On the subject of third-party reinsurance capital, the analysts said, “Third-party capital sat on the sidelines for a number of years, waiting to confirm that returns had truly course corrected before re-entering the reinsurance market.”  marking a $9 billion, or 7% increase from year-end 2024.Following this rapid growth, analysts at Autonomous now anticipate a moderate acceleration in alternative capital growth through 2026.

“2025 exhibited strong growth in overall alternative capacity, and 2026 is expected to see moderate acceleration in alternative capital growth as low return correlation with other asset classes becomes increasingly appealing to a wider range of investors,” the analysts said.Autonomous’ comments echo similar views to S&P Global Ratings, who recently said that it expects  Moving attention to reinsurance, Autonomous’ analysts noted that following discussions at AFIA, the outlook for the market appears to remain mixed as it continues to soften, with investor sentiment skewing a bit more negative.“The January renewals exhibited similar trends to 2025, with softening primarily related to property cat, though some pockets of specialty also continue to soften this year.

$100bn of annual global cat losses appears to be the new industry norm, with a significantly greater amount needed to start to re-catalyze property cat pricing.While most of the global casualty market is experiencing competitive softening conditions, the US casualty reinsurance market stands out as an exception where most reinsurers are slightly more constructive.Expectations for further price softening at the spring and summer renewals remain unsurprising,” Autonomous said.

Adding: “From brokers to third-party capital investors, nearly everyone we met with noted that while capacity has certainly increased to more than meet demand for expanded reinsurance coverage, competitive dynamics are still focused on pricing rather than terms and conditions.” However, while demand is expected to increase as 2026 unfolds into 2027, Autonomous outlined that capacity is still expected to outpace demand as both retained earnings from traditional reinsurers and alternative capital re-enter the market.“In our view, the reinsurance market, particularly on property cat exposures, are slowly but surely returning to buyers’ market conditions for primary underwriters as they bolster their reinsurance programs.” The acceleration in capital levels deployed into insurance-linked securities and other third-party capitalised reinsurance structures is ..All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.

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