Global reinsurers entered the midyear renewal season with record levels of capital, increased appetite for risk and greater flexibility, helping drive lower prices and improved terms for insurers, according to a new market report from Aon.

The report from the insurance broker found that property catastrophe reinsurance renewals at June 1 and July 1 delivered double-digit pricing reductions for most placements. Global reinsurance demand increased by more than 10 per cent, driven by insurers purchasing additional catastrophe protection in the United States, while capacity remained more than enough to meet demand.

Aon said global reinsurer capital reached a record $790 billion at March 31, an increase of $5 billion from the end of 2025, supported by growth in third-party capital. Alternative capital climbed to a record $141 billion, fuelled by investor demand for catastrophe bonds and sidecars.

The report said Florida had one of its best renewal seasons in more than a decade, while insurers in Latin America, Australia and New Zealand also benefited from more capacity and fewer market constraints. Midyear renewals also showed a shift towards customised reinsurance structures as insurers looked for more flexibility in managing risk.

According to Aon, investments in data quality, analytics and artificial intelligence are helping reinsurers unlock additional capacity while supporting more tailored products, including aggregate covers and earnings protection. Reinsurers also were more willing to provide flexible structures as competition increased.

The report noted that the sector has seen strong operating performance despite recent capital market volatility. Reinsurers generated an annualised average return on equity of 14.1 per cent during the first quarter.

Mike Van Slooten, Aon’s head of market analysis for reinsurance, said: “Conflict in the Middle East has prompted a shift in the outlook for global interest rates, which was a headwind to equity growth in the first quarter of 2026.

“However, midyear renewal outcomes have demonstrated the continued strength of reinsurer risk appetites and we expect to see a more flexible marketplace at January 1, assuming ceded losses and capital market volatility stay within expected ranges.”

While the report said the conflict in the Middle East had little direct impact on midyear renewals, it cautioned that marine, war, terrorism and political violence markets could face repricing at the January renewal season as claims emerge and geopolitical risks become clearer. Higher energy prices could also contribute to inflation across the wider insurance industry.