Property aggregate XoL rebounds with 50% increase in traded limits: Marsh Re

Property aggregate excess-of-loss (XoL) capacity has rebounded strongly driven by a 50% increase in traded limits, according to reinsurance broker Marsh Re, revealing that nearly 40% of buyers now integrate frequency protection into their XoL strategies, up from just over a quarter two years ago.

Marsh Re’s Global Specialties division noted that strong reinsurance profitability in 2025 boosted capital growth through retained earnings.

Combined with fresh capital from new entrants, this led to “a clear oversupply across retrocession and catastrophe on direct and facultative (D&F) placements throughout 2026.”

Addressing excess property capacity, Marsh Re noted that, “excess capacity drove average risk-adjusted rate decreases settling in the high teens, with pressure on retentions and coverage.”

“2026 occurrence excess of loss (XoL) pricing now aligns with 2021, albeit average attachment points are still higher than during that period,” the broker added.

For property covers, reinsurance and non-marine retrocession, aggregate coverage is now far more available than it has been in recent years it seems, with Marsh Re’s figure of 50% more in limits getting traded suggesting a strong recovery for this product segment, a meaningful benefit for buyers.

But it’s encouraging that attachments remain at higher levels still, as this suggests the market is finding ways to deliver on more frequency protection while still maintaining the important structural contract features and terms that capital providers are reluctant to weaken.

In addition, Marsh Re explained that property retro quota share capacity increased by 8% in 2026. While total limits placed exceeded US$20 billion, marking a 30% increase over four years, supported by a three-year average estimated ultimate loss ratio of 42%.

The broker further noted that absent any significant catastrophe loss activity during the second half of 2026, the predominant market themes observed throughout the current year are anticipated to persist into 2027.

“Reinsurer returns will be strong and will drive further capital growth through retained earnings,” Marsh Re said.

“The global specialty insurance and reinsurance market is navigating a period of genuine complexity. Geopolitical uncertainty, emerging technology risk and sustained claims pressure are all shaping conditions and doing so unevenly across classes, geographies, and client segments,” explained James Boyce CEO, Global Specialties.

“Despite that, the market remains healthy. Dedicated reinsurer capital has continued to grow, supporting meaningful expansion of the majority of the global specialties market throughout 2026. Amid the recent rate reductions, reinsurers’ results have remained strong across Property, Construction, and Credit, with mixed results in Marine & Energy composite,” Boyce continued.

Boyce further added: “Soft markets do not last forever. When conditions harden, as they will, the decisions made now about structure, partners, and strategy will prove far more consequential than any single renewal outcome. The brokers and clients who use this period well, building resilient programmes and deepening the right relationships, will be best positioned when the cycle turns. We have navigated these conditions before, and our commitment to our clients does not change with the market cycle.”