The Reinsurance Daily

Palomar’s $3.92bn Quake Tower Expansion Signals ILS Appetite; Aspen Capital Markets Surpasses $50m Q1 Fee Income

By The Reinsurance Daily Editorial ·

Palomar’s $3.92bn Quake Tower Expansion Signals ILS Appetite; Aspen Capital Markets Surpasses $50m Q1 Fee Income

Palomar Extends Earthquake Reinsurance Tower to $3.92bn at June Renewal

Palomar Holdings extended its earthquake reinsurance tower to a record $3.92 billion at the June 2026 renewal, up from last year’s program. This expansion drew heavily on Insurance-Linked Securities (ILS) capacity, with a reported $1.28 billion of limit supported by ILS investors across multiple layers. The lowest program layer begins at $421 million attachment, indicating a meaningful drop-down of risk and retention. CEO Mac Armstrong cited a 5% weighted average rate-on-line for the program as evidence of competitive capital markets pricing, further facilitated by the strong presence of cat bond markets. ILS capacity has been integral in enabling Palomar to extend coverage at stable terms, reinforcing the company's strategy to balance retention with third-party risk transfer.

"The expansion of our earthquake reinsurance tower to $3.92 billion, with meaningful ILS support, exemplifies the depth and efficiency of current capital markets. Our ability to secure a 5% weighted average rate-on-line speaks to robust market competition." — Mac Armstrong, Palomar CEO

Aspen Capital Markets Records 11% Fee Income Gain to $50.6m in Q1 2026

Aspen Capital Markets achieved $50.6 million in fee income for Q1 2026, marking an 11% increase year over year. The underlying capital managed grew to $2.73 billion, positioning Aspen for further scalability within alternative reinsurance solutions. Gross written premiums through managed platforms reached $194.4 million in the same period. CEO Mark Cloutier credited a 15% growth in investor contributions over the prior quarter for Aspen’s ability to deploy capacity and optimize returns via fee-based structures, underscoring resilient investor appetite despite ongoing softening in base reinsurance pricing.

KBW: Softening Reinsurance Pricing Still Deemed Adequate at 2021/2022 Levels

KBW reports that although reinsurance rates have softened, pricing levels have reverted to those seen in 2021/2022 and are “widely viewed as adequate” by market participants. The report cites a $100 billion reinsurance market, with typical rate-on-line contractions of 15–20% from 2023 peaks. Analysts noted that most cedents are not expressing disruptive concerns, with capital inflows ensuring continued stability.

Florida June Renewals: Strong Risk Appetite in Evidence, Says Guy Carpenter

Guy Carpenter observed robust risk appetite among reinsurers for Florida’s June 2026 renewals. According to the firm, overall capacity offered reached 76.8% of total requested limit, with some programs being up to 66% oversubscribed. Industry placement rates across the region exceed 45% compared to budgets, attributed to ample retrocession and increased alternative capital participation. The stabilization of pricing and capital suggests that cedents encountered fewer frictional negotiations.

Insurance Australia Settles $4 Billion Greensill Federal Court Litigation

Insurance Australia Group (IAG) has reached a settlement related to claims arising from the collapse of Greensill Capital, resolving exposures estimated at $4 billion. The litigation centered on IAG’s trade credit policies, with settlements reportedly ranging between $2.9 billion and $3.5 billion in potential payouts. The settlement reduces future uncertainty for IAG and its reinsurance panel, with commentators suggesting aggregate recovery of $3 billion after reinsurance protections are applied. The outcome removes a major legacy exposure from the portfolio, though details of cost-sharing among reinsurers remain undisclosed.

NY Lawmakers Approve Auto Insurance Reforms in $268.5 Billion Budget

New York’s legislature approved Governor Hochul’s auto insurance reforms as part of the $268.5 billion state budget. The reforms target an industry with $42.3 billion in annual written premiums and an average loss cost of $1,896 per vehicle. The new measures are expected to drive gross savings of 10–12% across key auto carriers, with a potential marketwide impact on the $14 billion annual claims pool. Lawmakers report that 32% of recent rate filings were subject to expedited review to facilitate timely market adaptation, reflecting explicit regulatory oversight on pricing flexibilities.

European Insurance and Occupational Pensions Authority — Regulatory Activity

The European Insurance and Occupational Pensions Authority (EIOPA) remains active in setting prudential regulations and monitoring the region’s €10 trillion insurance sector. EIOPA’s 2026 work program focuses on supervisory convergence and systemic risk analysis, impacting more than 2,500 direct insurance and reinsurance undertakings. The authority’s policy outputs influence both cross-border group capital requirements and Solvency II calibrations for all EEA-based reinsurers.

Key Takeaways

Sources

Palomar extends earthquake reinsurance tower to $3.92bn at June renewal, cites ILS capacity — artemis.bm
Aspen Capital Markets fee income rose 11% in Q1 2026 to $50.6m — artemis.bm
Despite softening, reinsurance pricing at 2021/2022 levels “widely viewed as adequate” – KBW — artemis.bm
Reinsurers Bring Strong Risk Appetite to Florida’s June Renewals: Guy Carpenter — insurancejournal.com
Insurance Australia Settles in Greensill Federal Court Case — insurancejournal.com
NY Lawmakers Agree to Governor’s Auto Insurance Reforms in New Budget — insurancejournal.com
European Insurance and Occupational Pensions Authority — eiopa.europa.eu