casualty reinsurance

RenaissanceRe, the Bermuda headquartered reinsurance underwriting firm and third-party capital manager, has added just over $1.4 billion of capital to its range of insurance-linked securities (ILS) structures and joint-venture vehicles so far in 2022.

The Fontana Holdings third-party capitalised casualty and specialty reinsurance focused joint venture vehicle launched by Bermudian reinsurer RenaissanceRe will have the flexibility to become market-facing and write business directly for counterparties, it seems.

The development of Fontana Holdings, RenaissanceRe’s newly announced, third-party capital-backed casualty and specialty reinsurance joint venture vehicle, sought to answer investor questions and respond to their needs for an efficient access point to these lines of business, Chris Parry explained to Artemis.

Bermuda-based RenaissanceRe Holdings Ltd. (RenRe) has created its first third-party reinsurance capital backed joint venture focused on casualty and specialty risk, Fontana Holdings L.P., which launches with $475 million of capital, most of which comes from institutional investors.

The reinsurance market is expected to take a much closer look at the adequacy of pricing and profitability for many longer-tailed lines of specialty and casualty business, especially as reinsurers have generally been unable to command the payback they may once have been used to, following the catastrophes of 2017.

Reinsurance reserve releases have been slowing over recent quarters for many in the sector, with the fourth-quarter of 2015 seeing more reinsurers reporting smaller releases, rather than larger, a trend that analysts at Keefe, Bruyette & Woods expect will continue.

Primary insurance firm AIG has begun its increased use of reinsurance, a strategic goal it outlined in a recent performance enhancement plan, with a just-announced two-year casualty reinsurance deal with global player Swiss Re.

Pricing in the casualty reinsurance space is expected to increasingly come under pressure owing to the presence of alternative capital, but it’s impact is unlikely to be as influential as seen in the property cat space, say analysts at Morgan Stanley.

The Lloyd’s Market Association (LMA) has released data which shows that the majority of casualty treaty reinsurance underwriters at Lloyd’s have concerns about the extent to which terms and conditions have been relaxed recently.

While the reinsurance market remains challenging strategically sound business models become more important than ever and while casualty lines offer several structural advantages, this can mean higher barriers to entry, according to analysts at Goldman Sachs.