Howden Re’s Construction outlook at 1.1.2026
Supported by the 2019-24 hardening cycle that corrected prior under-pricing and large-loss activity, Jonathan Conway and Kiran Strawson, Managing Directors at Howden Re discuss Howden Re’s Construction outlook at 1.1.2026.
Jonathan Conway, Managing Director, Construction and Engineering Treaty, Howden Re commented: “The construction reinsurance market has become increasingly competitive as strong underwriting performance and healthy margins have attracted additional capital, with both incumbents and new entrants expanding capacity through 2025. This influx is beginning to ease terms from historically elevated levels, but the softening remains orderly and disciplined, tempered by the long-tail nature of complex construction risks.”
Favourable conditions in the global construction market attracted additional capital into the class in 2025. Incumbent reinsurers increased deployments to defend or grow their positions, whilst new entrants – from established markets such as Lloyd’s as well as Bermuda as part of their broader specialty growth strategies – added meaningful supply. This expanded participation highlights the continued attractiveness of the market’s risk-return profile.
The additional capacity is providing buyers with greater flexibility and contributing to a softening of terms from historically elevated levels. At recent renewals, ceding commissions on quota-share treaties moved modestly higher. Excess of loss pricing eased slightly, with strong competition and abundant capacity putting signing pressure on programmes. The softening remains orderly, however, with underwriting margins largely intact.
These dynamics point to a market that is well capitalised and increasingly competitive, yet still broadly disciplined. Caution is reinforced by the long-tail nature of large and technically challenging construction projects. Recent losses (including the solar farm loss in Dubai for the 2018 underwriting year from flooding in 2024) illustrate how an extended tail can act as a brake on market softening, even when ultimate losses settle below initial estimates.
Kiran Strawson, Managing Director – Engineering, UK Global Specialty Treaty, Howden Re, added: “Looking ahead, the focus on global infrastructure, data centres (now considered critical infrastructure) and energy transition investments will continue to underpin growth. Whilst current data centre exposures are broadly being absorbed within existing treaty limits with one or two notable outliers, they remain a relatively small share of overall portfolios. A drive towards facilitised capacity (primarily at excess levels) to meet the US$100 billion plus investment pipeline reflects adjustments in supply and demand dynamics. “
As investment scales – across data centres as well as the wind, solar and other transition-related projects required to help to power these energy-intensive assets – the demand for capacity will only increase further. The construction reinsurance market enters this phase with strong capitalisation, solid technical margins and broad appetite, leaving it well positioned to meet these ever-growing needs.
Read Howden’s 1.1.2026 renewals report Re-balancing here: