K-Cessions

Hannover Re is currently operating on the assumption that its retrocession needs for 2026 will result in a similar placement as we saw at the start of this year, unless pricing proves particularly compelling to purchase more, Sven Althoff, Member of the Executive Board for Property & Casualty (P&C) explained today.

Hannover Re is anticipating a roughly EUR 230 million recovery from its retrocessional reinsurance to support its losses from the Los Angeles wildfires, with the majority of that expected to come from the proportional K-Cessions quota share sidecar, Sven Althoff, Member of the Executive Board for Property & Casualty (P&C) said this morning.

Global reinsurer Hannover Re increased its natural catastrophe retrocession protections at the January 1st, 2025, reinsurance renewals by EUR 100 million to a little more than EUR 1.2 billion, with growth in the aggregate excess of loss and whole account excess of loss covers more than offsetting a reduced K-Cessions sidecar for the year.

Earlier this year we reported that global reinsurance company Hannover Re was assessing its risk management need in relation to its K-Cessions quota share sidecar for the second year running, with a potential reduction to be expected and this morning executives from the company confirmed this again.

Artemis has learned that global reinsurance company Hannover Re is assessing its risk management need in relation to the K-Cessions quota share sidecar for the second year running and we’re told other major reinsurers may also pursue this approach, as companies manage their portfolios and are motivated to retain profitable risks.

Executives from global reinsurance firm Hannover Re said today that there is no sign of new capital in the reinsurance market aside from through the catastrophe bond sector and some unlocked trapped collateral, and also discussed the Baltimore Bridge collapse saying that retrocession recoveries are anticipated.

Hannover Re placed its K-Cessions quota share sidecar at US $757 million in size for 2024, shrinking the structure by 9% over the prior year. In an interview, Henning Ludolphs explained that despite some changes, the company has sufficient retrocession to take advantage of the hard reinsurance market environment this year.

Having significantly increased the amount of risk it cedes to retrocession partners at the start of this year, Hannover Re is now looking at the flexibility it has in the retro program and may opt to cede less to proportional retrocession partners next year, one of its Board Members said today.

German reinsurer Hannover Re has purchased a significant amount of retrocession protection in 2023, and while this has limited its growth appetite in the natural catastrophe space, the company has sufficient room to expand its appetite should opportunities present themselves, according to Sven Althoff, Member of the Executive Board, P&C, Hannover Re.

At the January renewals, global reinsurance firm Hannover Re capitalised on its long-standing relationships with investors to grow its K-Cession quota share sidecar structure to a record size, ultimately helping the company do more to support its ceding clients demand for natural catastrophe capacity.