60% of Insurers Plan to Buy More Facultative Cover, and Half Now Call It Capital Management

Sixty percent of insurers expect to buy more facultative reinsurance over the next two years and 13% expect to buy less, according to Willis's Facultative Reinsurance Report 2026, a survey of 380 senior decision makers published September 17 (Willis, September 17, 2026). Capital management is now the reason 52% of them give, up from 44% in 2024. Per-risk cover that a fifth of buyers once called a last resort has become the instrument they plan to grow on, at the cheapest point in a decade.

The survey was fielded in February and March by Coleman Parkes across North America, Europe, the Middle East, Asia-Pacific and Latin America, at companies of $1 billion to more than $10 billion in gross written premium. Between the fieldwork and the publication, US and Canadian property facultative rates fell 25% to 30%, roughly double the treaty decline, which is the price the respondents' plans now meet.

Key Takeaways

60% versus 13% is the split between insurers planning to buy more facultative reinsurance over two years and those planning to buy less, among 380 respondents at insurers with $1 billion or more of premium (Willis, September 17, 2026).
52% now cite capital management as a reason to buy fac, up from 44% in 2024, while 56% name global expansion as a leading opportunity, up from 39%, and 55% name increasing capacity, up from 48% (Willis, September 2026).
22% still describe facultative as a last resort, down from 28% two years earlier, and 82% call it a key part of managing risk, capacity, capital and appetite (Willis, September 2026).
25% to 30% is the decline in US and Canadian property facultative rates Gallagher Re recorded this year, against a 14.7% fall in Howden Re's January treaty rate-on-line index (actuary.info, May 2026).
54% of respondents name cyber as an emerging risk driving fac demand, up from 24% in 2024, the largest move in the survey and the line with the least per-risk loss history (Willis, September 2026).

What 380 Buyers Told Willis in February

Willis frames facultative as a growth tool (The Insurer, September 18, 2026). Fifty-two percent of respondents name entering new markets or risk areas as a strategic objective, up from 45%, and 55% name increasing capacity, up from 48% (Willis, September 17, 2026). Garret Gaughan, Willis's global head of direct and facultative, put it in one line: "facultative reinsurance is increasingly being used as a strategic tool to help insurers expand their capacity" (Willis, September 17, 2026). A last-resort share of 28% in 2024 is 22% now.

Risk priorities shifted with it. Geopolitics is cited by 57% of respondents, up from 52%; climate by 40%, up from 30%; and cyber by 54%, up from 24%, more than doubling in two years (Global Reinsurance, September 18, 2026). Respondents skew large: 47% write $1 billion to $5 billion of premium, 35% write $5 billion to $10 billion and 19% write more than $10 billion. So the growth ambitions belong to carriers that already have treaty programmes and are choosing to add per-risk cover on top.

Fieldwork dates carry the caveat. February and March 2026 preceded the mid-year renewals at which fac softened fastest, so the 60% who planned to buy more were planning against a price that has since fallen further. Willis's own read is that fac "provides valuable flexibility as organisations navigate uncertain times" (Global Reinsurance, September 18, 2026); the flexibility is real, and it is being bought at a discount the buyers did not yet know they would get.

Why Cheap Per-Risk Cover Reads as Capital

Facultative cover attaches to a single risk, so a cedent that buys it can write a larger gross line without touching its treaty. The fac cession reduces the net probable maximum loss on that risk, reduces the net premium it retains, and, because most treaties are written net of inuring facultative, reduces the exposure the treaty sees. That is why 52% can call it capital management: the ceded piece lowers the retained per-risk exposure that a rating agency or a regulator would otherwise charge capital against, for the price of the fac rate.

Price is what changed. Gallagher Re's 2026 facultative report put US and Canadian property fac rates down 25% to 30%, with loss-affected accounts taking double-digit reductions for the first time in the cycle, against Howden Re's 14.7% treaty rate-on-line decline at January and Guy Carpenter's 12%. Fac moved roughly twice as far as treaty on $648 billion of dedicated reinsurance capital, up 11% against demand growth of 1.4%, from reinsurers that posted an 82.5% composite combined ratio and a 19.3% return on equity in 2025. A carrier buying growth capacity in 2026 gets it at a rate that two years earlier would have bought half the limit.

Reinsurers selling it are the ones holding the treaty line. At Monte Carlo this month Berenberg found reinsurers preferring to concede price rather than terms on treaty programmes, and Europe's Big Four kept their catastrophe appetite by raising attachments and exiting aggregate covers. Per-risk fac is the door through which the softening reaches the cedent anyway: a 25% to 30% cheaper fac certificate on a large risk lowers the treaty's exposure to that risk, which is a working-layer concession delivered through a different contract. The 10% treaty cut and held attachment and the 30% fac cut are the same capital arriving by two routes.

Growth Written on Fac Stays When Fac Reprices

Those 60% who plan to buy more fac are, by the report's own framing, planning to write risks they would otherwise decline or write smaller. Fac-funded growth concentrates the reinsurer's per-risk book in the largest risks, the data-centre campuses and industrial plants where a single certificate carries limits in the hundreds of millions, at a rate set in the softest fac market since 2016. The cedent's gross line, its client relationship and its expense base are built on the certificate; the certificate renews annually.

Cyber is where that arithmetic is least tested. Its jump from 24% to 54% of respondents as a driver of fac demand makes it the fastest-growing reason to buy per-risk cover, on a line whose per-risk loss history is thin and whose aggregate rate has fallen for twelve consecutive quarters. A fac certificate on a large cyber risk is priced off a curve the reinsurer is still drawing, and the cedent's growth plan treats it as capital.

Its most useful number is the one that fell. When 28% of buyers treat fac as a last resort, its price is a residual; when 22% do, its price is an input to the gross underwriting plan, and the plan inherits the fac cycle. The 25% to 30% that came off US property fac in 2026 is the amount by which the 2027 growth plans of 60% of insurers are cheaper to execute this year than in the year the fac market turns. The growth will still be on the books.

60% of Insurers Plan to Buy More Facultative Cover, and Half Now Call It Capital Management

Key Takeaways

What 380 Buyers Told Willis in February

Why Cheap Per-Risk Cover Reads as Capital

Growth Written on Fac Stays When Fac Reprices

Further Reading

Sources