Speaking during RenaissanceRe’s Q3 2025 earnings call today, Kevin J. O’Donnell, President and Chief Executive Officer of the firm suggested that third-party capital is not likely to be the primary driver of pricing in 2026, adding that pricing in 2026 will be driven more by reinsurers’ comfort with return levels in the property catastrophe segment.
During the call, O’Donnell was asked whether RenRe is seeing signs that third-party investor interest in reinsurance is increasing or decreasing, and how this might affect the firm’s ability to raise capital in 2026.
“Because of the structures we have and because of the reputation we have in managing third-party capital, we have very good access to third-party capital, and that has been true even when it’s been more constrained for others,” O’Donnell explained.
“Right now, I don’t think third-party capital is going to be the driving influence on pricing in 2026. I think it’s more about comfort with return levels within property cat, and I think, reinsurers having a little bit more confidence and a little bit more capital.”
The CEO continued: “Good news is we expect that the demand side, so there’ll be more, will grow so there will be more property cat demand. So that said, the market will be slightly more favourable for buyers than for sellers, where I would say 2025 was a little bit better balanced, and that’s the reason we’re projecting roughly a 10% reduction in property catastrophe rates.”
O’Donnell also stressed that third-party capital is becoming increasingly interested in longer-tail liabilities and stated that he expects this trend to continue throughout 2026.
“I think there’ll be a little bit more third-party capital coming into perhaps longer tail casualty or specialty lines. All in all, it’s going to be driven by traditional reinsurers, third party capital will continue to be available, but not driving the show.”
Adding further context to RenRe’s approach to capital management, O’Donnell was also asked whether RenRe’s third-party capital business could eventually become bigger than its own balance sheet, and if so, would that ultimately change the company’s risk profile or control dynamic?
“It’s a good question. One of the things we look at each year is what is the right balance between what we’re obtaining and what we’re sharing. We share about 50% of our property cat and anywhere, depending on the line of business, 15-30% on the casualty specialty lines,” O’Donnell said.
“There are scenarios where we can make this narrow enough that within a certain target strategy, we are larger in third-party capital than we are with our own deployment of risk into that narrow strategy.
“So, there are scenarios where we could have larger third-party balance sheets than our own balance sheets, but I don’t see that occurring in 2026,” the CEO concluded.
