The US healthcare reinsurance market is entering a transitional phase, with shifting capacity, accelerating medical costs and rising demand for technical expertise reshaping the competitive landscape, according to Erik Rasmussen, head of US healthcare reinsurance at AXIS.
In his analysis, Rasmussen described a market moving into a period that "rewards clarity of purpose, specialty expertise, and long-term commitment."
He pointed to the retreat of several global reinsurers from US healthcare lines as a defining feature of the current cycle, arguing that the recalibration is opening space for specialist carriers prepared to bring stability and underwriting depth.
His characterization echoes wider commentary in the market. Gallagher Re has flagged the withdrawal of three major reinsurers from US medical lines, while Fitch has projected commercial group medical cost growth of close to 9% in 2026, which would mark the highest level in more than a decade, in figures reported earlier in the cycle.
Even as capacity contracts, demand for cover continues to grow. Rasmussen cited cost inflation as the principal force, noting that the average employer-sponsored health insurance cost climbed to US$17,496 per employee in 2025, up 6% on the previous year, and is projected to rise a further 6.7% in 2026.
Pharmacy inflation is doing much of the heavy lifting, propelled by GLP-1 weight-loss therapies, specialty drugs and emerging cell and gene treatments. The scale of the GLP-1 effect alone is unusually large for a single drug class.
Harvard Medical School health care policy professor Luca Maini has estimated that roughly 30% of this year's health insurance premium increase is tied to GLP-1s, with about 12% of US adults already on therapy.
The volatility is feeding through to the stop-loss market, which Rasmussen said is being lifted by broader self-funding adoption among employers of all sizes.
Aegis Risk's 2025 Medical Stop-Loss Premium Survey, distributed by the International Foundation of Employee Benefit Plans, recorded single-year rate increases of between 8.8% and 10% in 2025, with 49% of plan sponsors now reporting claims above US$1 million, more than double the share a year earlier.
Aegis principal Ryan Siemers said major writers had a "rough" final quarter of 2024, weighed down by advanced cancer treatments, premature births and hospital revenue strategies.
Provider groups taking on financial risk, alongside specialty segments such as oncology, nephrology, cell and gene therapy and behavioral health, are driving demand for tailored structures. The industry, Rasmussen said, "doesn't just need capacity. It needs capability."
Renewal pricing remains firm, with cedants favoring partners offering underwriting clarity and multi-year stability, an approach he said matches the AXIS strategy.
