The market for war, terrorism and political violence reinsurance is moving in two directions at once. Losses in the Middle East have pushed pricing higher and squeezed capacity in parts of the class, yet reinsurers are still finding room to write new business and stand up fresh consortiums in the same market.
Middle East losses in the war, terrorism and political violence (WTPV) class now sit north of $2 billion against an annual gross premium base of roughly $2.5 billion, according to Marsh Re's Global Specialties 2026 Market Update. The broker said the imbalance makes this the first year the class has run at a loss since 2001.
Howden Re put the figure higher still, estimating insured losses from the conflict across the political violence and terrorism market could exceed $3 billion, with capacity tightening sharply at the July 1 renewal as strikes linked to Iran's Revolutionary Guard Corps altered underwriting appetite.
Get the latest reinsurance news direct to your inbox twice a week. Sign up here
Most reinsurers there initially took a pens down approach to new business, and some now field more than 50 submissions a day as appetite reopens unevenly.
Read more: Political violence reinsurance tightens at July renewal
Fresh capacity has still entered the market. The Fidelis Partnership launched a political violence consortium in June with capacity of up to $47.5 million per risk in the Middle East, the same figure Marsh Re cited for the consortium it placed the same month, which can deploy up to $345 million globally, capacity that didn't exist twelve months ago.
The tightening fits a wider shift in how businesses rank political risk. Armed conflict has overtaken civil unrest as the exposure companies fear most for the first time on record, cited by 53% of respondents worldwide in Allianz Commercial's 2026 Political Violence and Civil Unrest Trends report, up from 48% a year earlier.
In the US, the response has reached Capitol Hill. The Senate Banking Committee voted 24 to 0 on September 17 to advance the Terrorism Risk Insurance Program Reauthorization Act of 2026, sending the bill to the floor after the House passed its own version in June.
TRIA has provided a federal backstop for private terrorism insurers since 2002, and lawmakers are weighing its renewal as the private WTPV market records its worst underwriting year in more than two decades.
Coverage is also harder to define because the threats no longer look like 2001. Marsh's 2026 Global Terrorism Risk Insurance Report found danger has moved from hierarchical plots on landmark buildings toward scattered networks mixing low-tech assaults, cyber operations and nuclear, biological, chemical and radiological scenarios, with conflicts worldwide doubling since 2005.
Catastrophic events in this class are rare but costly. The US Federal Insurance Office estimates the September 11, 2001 attacks generated around $59 billion in insured losses in 2024 adjusted terms, a figure cited by Morningstar DBRS, with roughly two-thirds borne by reinsurers.
James Boyce, Marsh Re's CEO of Global Specialties, said the wider specialty market is pulling in several directions at once. Capital kept growing through 2026, with solid results in property, construction and credit, while marine and energy stayed more mixed.
Aviation pricing was flat to down 5% in January against premiums up more than 300% since 2018, and credit pricing fell 10% to 15% even as commissions rose and deployment slipped from 122% to 120%.
Cyber shows the same split on a larger scale. The January 1, 2026 renewal produced the market's first ever $1 billion cyber excess of loss tower, according to Gallagher Re, even as pricing on such programs fell 32%, the steepest single period drop the broker's Cyber Risk Adjusted Rating Index has recorded, driven by surplus capacity chasing too little loss.
Read next: Cyber's great contradiction: surging risk meets record-low pricing
Construction rates eased 5% to 10%, with data center inquiries running two to three a week and contract values in the tens of billions, while marine and energy rates kept softening except for marine war, firmer on the US Israel Iran conflict.
Lloyd's is seeing its own version of capital arriving quickly. Saudi Reinsurance Company is buying a 22.5% stake in the holding company behind Lloyd's Syndicate 2024 for £8.95 million, part of a wave of seven new syndicates launched in 2025 and thirteen more begun trading on January 1, 2026, with institutional money from family offices, private equity and pension funds joining the trade capital that has long backed the market.
Boyce said soft markets don't last forever and decisions made now about structure and partners will matter more once conditions turn.
Get the latest reinsurance news direct to your inbox twice a week. Sign up here
