As per accountancy firm Deloitte’s 2026 Global Insurance Outlook, property and casualty (P&C) and life insurers are increasingly turning to investor-backed and other forms of alternative capital to navigate shifting market conditions.In its 2026 outlook, the firm notes that property and casualty (P&C) carriers will need more flexible capital models that blend self-retained and reinsured risk with investor-backed instruments such as catastrophe bonds and other insurance-linked securities (ILS) to better manage volatility and remain competitive.Moreover, Deloitte also explains that the P&C insurance segment appears to be moving beyond a prolonged hard cycle and entering a period of margin pressure and slower premium growth.Furthermore, the company also noted that carriers are grappling with structural pressures.

Deloitte states that broker consolidation is affecting carrier negotiating strength, large corporations are progressively opting for self-insurance via captives, and alternative risk players are making their way into the market.“To stay competitive, carriers will likely need more agile capital models that integrate retained risk with third-party reinsurance to manage volatility, while also leveraging collaborative financing vehicles like cat bonds, sidecars, and other insurance-linked securities,” Deloitte explained.“These structures enable insurers to transfer a portion of risk to capital markets, which can enhance capital flexibility, broaden their capital base, and strengthen resilience against large-scale losses.” In the same report, Deloitte also highlighted how a number of life and annuity players are also utilising reinsurance sidecars and partnerships with alternative asset managers.

“To further boost capital efficiency, several life insurers are turning to reinsurance sidecars to move blocks of business to offshore locations that have fewer demands for capital reserves to offload policy liabilities. These vehicles allow outside investors to share in profits and risks, freeing up capital for insurers to underwrite new business,” the firm explained.Previous data from ratings agency AM Best shows that As well as this, three additional sidecars were announced and launched in 2024.One of the most notable of these was a life and annuity focused reinsurance sidecar “These alternative investments are typically less liquid and transparent than public corporate bonds and loans, which can lead to insurance regulators working actively to address this opacity,” Deloitte added.

“The National Association of Insurance Commissioners, for example, is developing guiding principles to update risk-based capital formulas to help enhance the precision and transparency of risk-based capital calculations related to asset risk.” As a reminder, you can find details of numerous reinsurance sidecar investments and transactions, including life reinsurance sidecar structures, in our directory of ..All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.Our can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.