Howden Re’s Credit and Political Risk Insurance outlook at 1.1.2026
Howden Re’s Credit and political risk insurance team says the Credit and political risk (CPRI) market delivered another strong year of growth and performance in 2025.
Phil Bonner, Managing Director, Global Specialty Treaty, Howden Re commented: “2025 was defined by a rare combination of strong growth, disciplined underwriting and sustained outperformance across the CPRI market. Elevated demand from banks and corporates was largely matched by increased capacity, allowing incumbents and new entrants to expand participation without undermining technical standards. Despite macroeconomic and geopolitical volatility, claims experience remained stable with pricing easing only gradually and underwriting rigour continuing to distinguish CPRI from broader commercial lines.”
Supply and demand dynamics remained broadly balanced, with higher client uptake met by a corresponding rise in capacity. Although the focus on high-quality risks led to pockets of overcapacity and a general easing in pricing, reductions were measured across the wider market, constrained by conservative underwriting and the market’s overall supply limitations.
Incumbents sought to materially increase line sizes in 2025 by offering more capacity on a per risk basis. This additional supply, combined with several new market entrants, helped absorb a portion of the elevated demand from banks and corporates navigating a volatile macroeconomic and geopolitical environment, though demand continued to outstrip available capacity in certain areas.
These trends are reflected in available (albeit limited) data. In the US, credit, surety and fidelity – a reasonable proxy for the global CPRI market – grew by 10% in 1H25 compared with only 5% for major US commercial lines. The incurred 1H25 loss ratio for the same markets was 26% compared with 57% for major US commercial lines. The three global credit insurers recorded combined ratios in 2024 of 75% on average.
High underwriting standards remain a defining feature of the CPRI market, with (re)insurers targeting a narrow window of volatility. Despite significant macro uncertainty, 2025 saw no major deterioration in claims. The underwriting rigour and restructuring required to navigate sovereign defaults, Russia-Ukraine war payments and credit events helped to shield the market from potential losses arising from a small number of high-profile private credit defaults.
Marius Fischer, Managing Director, Reinsurance Broking Credit & Financial Risk, Howden Re added: “Looking into 2026, the CPRI market is expected to continue along a path of gradual and selective softening, driven by strong competition for more standardised risks but underpinned by resilient demand from banks and corporates seeking capital relief and balance sheet protection. Increasing demands from Funds are also fuelling opportunity. This is bolstered by increased participation from institutions that historically were not major buyers, including US banks. Absent a major loss event, underwriting discipline and constrained specialist talent are likely to act as natural stabilisers, preventing any abrupt erosion of margins despite increasing capacity.”
Strong performance has contributed to steady pricing declines, with intensifying competition bringing reductions of 10-20 points from post-COVID highs in the direct market for more standardised and commoditised risk types. Reinsurance renewals at 1 January 2026 saw ceding commissions on quota-share business increase moderately. Similarly limited downside movements were recorded for excess of loss programmes, or exposures expanded on some business where rates were flat.
Absent major losses, gradual softening across the CPRI market for more standardised risk types is expected to persist into 2026. Demand is set to remain strong as banks and corporates continue to rely on CPRI for capital relief, balance sheet management and risk mitigation – bolstered by increased participation from institutions that historically were not major buyers, including US banks.
One immediate challenge facing the market, however, is the shortage of experienced underwriting talent. Competition for skilled CPRI professionals has intensified, driving up hiring costs and raising expense ratios, particularly amongst new entrants and MGAs. It has also reinforced the perception amongst senior leadership teams that CPRI business is a niche class, which can weaken long-term commitments if losses materialise above expectations.
The talent issue is likely to result in well-established underwriters with deep experience and strong management support being better positioned to succeed. Those unable to attract and retain talent risk losing internal visibility, defaulting to overly cautious approaches with the potential to ultimately shrink into irrelevance.