Some 52% now cite capital management as a key reason for buying cover.
Insurers are increasingly using facultative reinsurance to manage capital, expand capacity and enter new markets as they look for growth opportunities in a softening market, according to a Willis survey.
The Facultative Reinsurance Report 2026, conducted by Willis, a WTW business, and Coleman Parkes Research, surveyed 380 senior insurance executives across North America, Europe, the Middle East, Asia-Pacific and Latin America.
More than half (52%) of insurers cited capital management as a key reason for buying facultative reinsurance, up from 44% in 2024.
Meanwhile, 56% identified global expansion as one of their biggest opportunities over the next two years, up from 39%.
Entering new markets and risk areas was a top strategic objective for 52% of insurers, compared with 45% in the previous survey.
Another 55% said increasing capacity was a priority, up from 48%.
The survey also found that 60% of insurers expect to increase their use of facultative reinsurance over the next two years, compared with 13% planning to reduce their use.
Some 82% said facultative reinsurance is an important part of their strategy for managing risk, capacity, capital and risk appetite.
Only 22% said they use it as a last resort, down from 28% in 2024.
The findings point to a shift in how insurers use facultative reinsurance, from mainly protecting against difficult risks to supporting expansion and capital management.
At the same time, insurers are becoming more concerned about emerging risks that could affect market conditions.
Geopolitical tensions were cited by 57% of respondents, up from 52%, whilst 54% cited cyber risks, up from 24%, and 40% cited climate risks, up from 30%.
Garret Gaughan, global head of direct and facultative at Willis, said facultative reinsurance is increasingly being used to help insurers expand capacity, enter new markets and manage capital whilst providing flexibility amidst uncertainty.