SIRC 2026: Renewal discussions move beyond price to structuring: Gallagher Re
November 2 2026 by Aidan Gregory
Abundant capacity, strong retained earnings by reinsurers, and benign insured natural catastrophe losses in 2026 will drive a shift beyond price to program optimisation at the coming 1.1 renewals in Asia Pacific, according to Gallagher Re’s regional chief.
Roshan Perera, managing director and head of APAC in Singapore, said that the reinsurer expects a continuation of the market softening and a relaxing of terms and conditions at the coming 1.1 renewals in the region.
“The region continues to benefit from strong reinsurance capacity,” Perera said. “Reinsurer balance sheets remain healthy, profitability has been attractive over recent years, and alternative capital continues to provide additional support.
“Capacity is generally available across most classes and territories. Regional insured losses in 2026 also remain below long-term averages, despite several notable events. This is creating a competitive environment and giving cedents greater flexibility in how they structure their programs.”
According to Perera, following the steep softening seen during recent renewals in the region, the conversation between cedents and reinsurers is now shifting from price to program optimisation.
“The focus is increasingly on achieving the right balance between cost and protection rather than simply seeking the lowest possible reinsurance spend.”
Roshan Perera, Gallagher Re
“While pricing remains important, many insurers are using the current environment to revisit attachment points, coverage structure, capital efficiency and earnings protection,” Perera said.
“The focus is increasingly on achieving the right balance between cost and protection rather than simply seeking the lowest possible reinsurance spend.”
While insured natural catastrophe losses have remained relatively benign in 2026, which has fuelled strong reinsurer earnings, the industry faces rising risk on several fronts, including climate volatility, with the arrival of El Nino in 2026 driving volatile weather patterns across the region, raising the risk of flooding, severe drought, and more frequent and powerful typhoons.
Recent catastrophes in APAC, such as the floods in Bangkok in September, the landslide in Nepal in August, and the Kumamoto earthquake in Japan have served as a reminder that APAC faces intense natural catastrophe risk, even if overall losses have remained below long-term averages, according to Gallagher Re.
“The current Office of Insurance Commission (OIC) estimate for the Thailand floods is approximately US$330 million, which is below the insured losses arising from the Southern Thailand floods in 2025,” Perrera said.
“Current insured loss estimates associated with the Nepal event are approximately US$200 million across Nepal and China, although the wider economic losses are expected to run into the billions of dollars. The largest insured natural catastrophe loss in the region this year has been the Kumamoto earthquake in Japan, currently estimated at approximately US$1.3 billion.”
The events may impact individual programs and portfolios, but will not fundamentally alter the supply demand balance in the reinsurance market.
“The market enters this renewal season with significant capital and generally healthy reinsurer balance sheets,” Perera said. “As a result, we do not expect these losses on their own to drive a broad market-wide hardening cycle.”
Alongside natural catastrophes, the industry faces complex challenges from new and emerging risks, such as the AI boom, cyber, and geopolitical tensions due to the conflict in the Middle East.
“Complexity is becoming a bigger challenge than capacity,” Perera added. “Insurers are looking for support around emerging risks, climate volatility, capital management, specialty growth opportunities and increasingly sophisticated portfolio management decisions together with greater importance to risk-based underwriting approach.
“Access to capital is important, but helping clients navigate a more complex risk environment is becoming an equally important source of value.”
In an increasingly complex risk landscape, cedents are using the savings from the market softening to obtain more favourable reinsurance coverage to support their business plans, safeguard their profitability and improve capital flexibility, according to Gallagher Re.
“A key objective is maintaining sustainable profitability,” Perera said. “Cedents are focused on protecting balance sheets and earnings while continuing to support growth ambitions.
“Across Asia, insurers continue to see opportunities in areas such as health, specialty lines, cyber, renewable energy, electric vehicles and other emerging risks. As these opportunities develop, clients increasingly want reinsurance structures that support strategic growth rather than simply transfer risk. Discussions around innovative parametric products are also happening.”
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