Abundant reinsurance capital a “window” to diversify before conditions shift: Madea, CEO HCMA

Today’s abundant reinsurance and insurance-linked securities capital levels presents the sector with a window of opportunity to diversify its capital stack and secure longer-duration solutions, before the market inevitably shifts again, Jarad Madea, CEO of Howden Capital Markets & Advisory told us in an interview.

Speaking around the 2026 Monte Carlo Rendez-vous event, Madea highlighted that the time to act is now rather than when the market forces the issue, as capital abundance won’t last forever.

While capital remains readily available and the range of solutions offered includes structures that can provide his firm’s clients with real resilience through cycles, making long-duration capital market solutions particularly attractive at this time.

“The reinsurance market has entered a softer phase. Pricing has eased, capital is abundant, and capacity is broadly available. If we learn anything from past cycles, we know it is unlikely to stay this way,” Madea explained.

“Geopolitical uncertainty, casualty reserve deterioration, cyber risk, inflation, unknowns around AI, CAT events, the unknown, and capital market dislocation are all capable of reversing the cycle quickly and without warning. The question for management teams is not whether the market turns, but whether they have built their business to withstand it before it does.

“Every board should be asking the same thing: if the market changed dramatically tomorrow, what’s the contingency plan? Most companies pour resources into growth strategies and give too little attention to what happens when conditions turn.”

Madea urges his clients to start with an honest audit of their capital base and sources, to identify how diversified it really is and where that can be improved upon.

Clients should look at, “which components are most vulnerable under stress, and what can be locked in now while the window is open. Markets don’t tend to reward waiting,” Madea said.

Going on to explain that, “Today’s abundant capital is a window to secure long-duration solutions before conditions shift, including multi-year reinsurance capacity, catastrophe bonds, casualty sidecars, or Funds at Lloyd’s. Each reduces exposure to future pricing and capital market volatility.

“Cat bond issuance remains near record levels. Financial investor interest in Lloyd’s capital continues to grow. Casualty sidecars are moving from concept to execution across carriers, reinsurers, MGAs, and fronting companies.”

While the re/insurance market is often focused on diversifying its portfolio of risks, diversifying the capital can be overlooked and Madea feels that there is a fantastic opportunity to address that at this point in time.

“The businesses that win the next cycle will not rely on a single market. They will draw on multiple forms of capital at once, including traditional reinsurance, ILS capital, cat bonds, casualty sidecars, private credit, Lloyd’s capital, strategic investors, and reciprocal structures,” Madea told Artemis.

“The practical test follows directly: whether capital is genuinely diversified, whether the geographic footprint is diversified, whether the regulatory structure is optimised, and whether alternative structures could improve capital efficiency.

“Rates are down, but the risk in the world has not gone anywhere. Clients need a contingency strategy today, because the market will turn. The businesses that come out ahead will be the ones that built their resilience before they needed it.”

The HCMA CEO concluded, “This is not about sounding alarmist. It is about giving clients a practical way to think about resilience while the market is still constructive enough to act on it.”

Read all of our interviews with ILS market and reinsurance sector professionals here.