Analysts view Cortina and similar structures as a negative for reinsurers amid market softening

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A report from Evercore ISI on the recently announced Aon and Blackstone reinsurance facility at Lloyd’s, Cortina, emphasises that while this type of structure has the potential to attract more disciplined capital, introducing more capacity to a finite risk pool is still a negative for reinsurers.

Last week, the much discussed and awaited Cortina syndicate 1956 was officially launched by broking group Aon and funds associated with alternative asset manager, Blackstone.

The facility received Lloyd’s Council’s ‘in principle’ approval on October 16th 2026, and is expected to begin underwriting from January 1 2027. Cortina will provide dedicated, multi-year reinsurance capacity to clients from institutional capital, adopting a conventional lead/follow approach.

The announcement said that the syndicate will broaden the capital available to clients and support the continued growth and resilience of the reinsurance market, and will complement traditional reinsurers.

In a recent report, analysts at Evercore ISI cite Artemis, our ILS-focused sister publication, who reported that Cortina is set to bring $500 million of capital and write around $1.6 billion of premium.

Analysts note that while this is small in comparison to the estimates $400 billion to $450 billion premium reinsurance marketplace, they expect it to scale in the future as other brokers launch similar facilities “that will serve to act as another softening force in the reinsurance pricing environment that already has excess capital.”

Since the highs of 2023 following the market reset, reinsurance pricing has softened in many lines and regions, notably in the property catastrophe space amid a relatively benign loss experience and record levels of capital, which has been driven in part by the continued rise of alternative capital, but has also happened without an influx of reinsurance startups.

“However, we think Cortina and similar structures in the future could be a bit more disciplined than capital that entered in the past thru reinsurance start ups that weren’t responsible underwriters. Despite this, it is a negative for Reinsurers as it introduces more capacity to the finite risk pool and could open the way for more structures at other brokers with other asset managers,” say analysts.

Analysts do acknowledge that while alternative capital is small, estimated at around 3% of global premium, there’s potential for growth and for more pressure to be put on traditional reinsurers, although that market’s discipline has surprised Evercore ISI.

For Aon, analysts expect Cortina to serve as a modest organic growth tailwind on volumes and market share, “as it brings additional capacity at better pricing and on additional administration fees”.

“It will be interesting to see how much capital follows suit as we suspect other brokers launch similar structures. While third party capital has entered in the past via reinsurance startups, it appears like this is another avenue for that capital to enter without the exit risk. It is yet another sign of the softening market as more capacity enters which will weigh on pricing even if it is likely somewhat more responsible than start-up reinsurers in past cycles. We haven’t seen a noticeable impact on revenue growth at the brokers from facilities in the past but instead view these as ways to support revenue growth in more challenging pricing environments,” conclude analysts.

The post Analysts view Cortina and similar structures as a negative for reinsurers amid market softening appeared first on ReinsuranceNe.ws.

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