Nearly two-thirds plan to increase usage over the next two years.
Insurers are increasingly using facultative reinsurance to support growth and manage risk as abundant capital continues to push insurance and reinsurance markets into a softer phase, according to a WTW survey.
The 2026 Global Facultative Reinsurance Trends Report, conducted with Coleman Parkes Research, surveyed 380 senior insurance executives across North America, Europe, the Middle East, Asia-Pacific and Latin America.
Global expansion was identified as one of the biggest opportunities over the next two years, with 56% of respondents citing it, up from 39% in 2024.
Insurers are increasingly looking beyond their traditional markets to support growth as capacity expands and rates soften.
Capital management was the leading reason for buying facultative reinsurance, cited by 52% of respondents compared with 44% in 2024.
Insurers are using facultative cover to deploy capital accumulated during the hard market whilst managing additional exposures.
Demand for facultative reinsurance is also expected to rise.
About 60% of respondents plan to increase their use of facultative reinsurance over the next two years, whilst only 13% expect to reduce it.
The survey found that 82% consider facultative reinsurance a key part of their strategies for managing risk, capacity, capital and risk appetite.
Only 22% said they use it as a last resort, down from 28% in the previous survey.
At the same time, insurers are increasingly concerned about risks that could reverse the current market cycle.
Geopolitical tensions were cited by 57% of respondents, up from 52% in 2024, whilst 54% cited cyber risks, up from 24%, and 40% cited climate risks, up from 30%.
WTW said a major systemic event involving geopolitics, cyber or climate risks could put pressure on the market and potentially lead to a return to harder conditions.