According to Howden Re, the dynamics of supply and demand in the US casualty reinsurance market led to predominantly stable conditions during the January 2026 renewals.But the firm also highlighted that rising use of casualty insurance-linked securities (ILS) and sidecars in the US contributed to enhancing clients’ negotiating power throughout the season.In its 1/1 January 2026 reinsurance renewals report, broker Howden Re explained that expectations for casualty lines heading into 1/1 were more balanced.This was characterised by a continued emphasis on ensuring reserve and price adequacy for certain US liability lines, which were being influenced by underwriting actions taken by cedents.

However, the broker noted that this was countered by improved performance in other long-tail classes and geographies.“Supply and demand dynamics in the US casualty reinsurance market resulted in largely stable conditions at 1 January 2026 renewals.Although the loss environment for liability lines continued to be driven by social inflation concerns, overall capacity remained steady, with no material changes in the number of active reinsurers.

The trend towards greater syndication continued, reflecting typical line-size constraints and the high number of markets competing for shares on programmes,” Howden Re said in its report.Concurrently, the broker also said that the expanding role of casualty insurance-linked securities (ILS) and sidecars was an important factor during the renewal process.Casualty sidecars have gained considerable momentum throughout the last year, with many cedents actively pursuing them to secure additional underwriting capacity, optimise capital efficiency, and also gain access to stable, long-term financing from institutional investors.

As we reported throughout last year, a number of new casualty sidecars were launched or expanded in the latter half of 2025, with significant players like  MultiStrat, and  involved.Already this month we have also reported on another significant casualty ILS transaction, as reinsurer .“In addition to increasing supply, these vehicles are also removing some premium from the open market, reducing the amount cedents need to place traditionally.

Whilst this has not yet had a meaningful impact on the traditional casualty reinsurance market, a continuation of the trend could begin to influence supply-demand dynamics over time,” Howden Re explained.Moving forward, Howden Re’s report also highlighted how the international casualty market experienced modest softening at the January renewals, with widespread price reductions due to increased capacity and a generally stable loss environment.According to the broker, programmes with US exposures faced more challenging renewals with outcomes sensitive to loss volatility associated with nuclear verdicts, with programmes showing signs of loss deterioration typically seeing pricing increase.

Meanwhile, buyers in London’s market benefitted from strong supply, as incumbents looked to deploy capacity not used in the property market to meet broader growth targets.Howden Re also noted that the casualty market saw increased participation from several US and Bermudian reinsurers too at 1/1.“This reflected another year of strong performance, with results still benefitting from reduced line sizes following Decile 10 and the subsequent hard market.

Whilst claims inflation and falling rates are beginning to drive modest deterioration, claims activity has been limited which has tempered any experience account deterioration,” Howden Re added.Concluding: “With underlying account dynamics remaining broadly stable, reinsurer results continuing to be profitable and capacity plentiful, London casualty excess of loss programmes recorded risk-adjusted reductions of 5-10% at 1 January 2026 renewals.” Read all of our ..All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.

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