Reinsurance News

New capital helped to mitigate the dislocation of global reinsurance markets at the key January 2021 renewal season, with ample supply to meet cedent demand, while there is an expectation that additional new capital comes on-stream early this year.

The current firming of reinsurance is perceived as “not a classic hard market” by analysts at Peel Hunt, who after meeting with underwriters from the Lloyd’s market concluded that rate momentum should persist through 2021.

The fact new reinsurance start-ups, the so-called Class of 2020, have no legacy portfolios of risk and so are unencumbered by recent years of catastrophe losses, exposure to the COVID-19 pandemic and issues such as social inflation, makes them the best opportunity to invest in the rising reinsurance tide, according to analysts at Jefferies.

Global reinsurance capital levels returned to their pre-pandemic high at $625 billion by the end of September 2020, with a slight rise in alternative reinsurance capital recorded during the third-quarter by broker Aon.

MetLife, Inc., one of the largest life and annuities insurance groups in the world, has announced that it completed four UK based longevity reinsurance transactions with Legal & General Assurance Society Limited (Legal & General) in 2020.

RenaissanceRe, the Bermuda headquartered global reinsurance company, had lifted the amount of assets managed within its third-party capital, joint venture and managed insurance-linked securities (ILS) fund vehicles to $6.9 billion by October 2020, with these structures now getting close to equalling the reinsurers own capital base.

Mars Incorporated, the American company which is one of the largest globally active and multinational manufacturers of food products, confectionery and pet food, has said that alternative capital is attractive to the firm as a potential backer for its captive, whole parametric risk transfer is seen as a “fantastic” risk management tool.

Global reinsurance broker Gallagher Re, part of the Gallagher group, successfully brokered $140 million of traditional mortgage reinsurance for Arch Capital during 2020, as part of the firms Bellemeade Re mortgage insurance-linked securities (ILS) program.

Australia headquartered global insurance and reinsurance firm QBE has increased the top of its main catastrophe reinsurance tower to $3.4 billion, with the company saying its renewal came in at a premium rate increase of under 5%, but restructured things slightly to account for heightened catastrophe frequency.

A shift towards underwriting more reinsurance business on a quota share basis could matter more for the forward-profits of many large reinsurers in 2021, than the lower-than hoped for rate increases in excess-of-loss treaty pricing, analysts at Barclays said in a report yesterday.