retro

As the insurance-linked securities (ILS) market continues to expand, Augment Risk is positioning parametric triggers not merely as a peripheral alternative, but as a central, diversifying asset class defined by its structural independence from traditional indemnity-based retrocession, a shift the firm believes is fundamental to unlocking the next phase of third-party capital allocation.

At the January reinsurance renewals SCOR grew its North America catastrophe risk book, seeing pricing as still attractive and also expecting other opportunities to deploy more capacity there this year, while the reinsurer also expanded its Risk Partnerships business where third-party capital partners participate.

Bermuda-based insurance and reinsurance firm Lancashire Insurance Holdings is very pleased with the outcome of its outwards reinsurance at the January 1, 2026 renewals, with the firm’s Chief Underwriting Officer (CUO) Paul Gregory particularly highlighting a strategic reduction in the firm’s aggregate attachment point.

UK government backed mutual terrorism reinsurance firm Pool Re has completed the placement of its 2026 retrocession placement, securing £2.75 billion of aggregate excess of loss cover, which also includes new cover for non-damage business interruption (NDBI).

Large European reinsurer Hannover Re expanded its retrocession protections by around 17%, or EUR 200 million to EUR 1.4 billion at the January 1st, 2026, reinsurance renewals, with increased capacity for its capital markets backed K-Cessions quota share sidecar facility, and a new parametric earthquake cover.

As per reinsurance broker Howden Re, capacity within the retrocession market was more than sufficient to meet demand at the January renewals, largely due to a combination of retained earnings for insurance-linked securities (ILS) and rated carriers, as well as ILS inflows, and new entrants.

The retrocession renewals for January 1st 2026 were finalised much later than usual. But, with ample capacity available from traditional and ILS markets, buyers achieved price reductions and also re-introduced more frequency protection to their coverage, according to Gallagher Re.

As per broker Guy Carpenter’s 1/1 reinsurance renewals report, there was a notable rise in demand for property retrocession lines during the January renewals, with the company noting that ongoing growth in supply contributed to some price reductions and broader coverage.

The private insurance-linked securities (ILS) market is approaching the January renewals from a strong standpoint, with capacity projected to be marginally higher, which may exert some pricing pressure. However, according to Cahal Doris, CIO Private ILS at Twelve Securis, the firm still expects to observe technical discipline within the market.

A recent report from KBW analysts, following their semi-annual trip to Bermuda in anticipation of the January 1st renewals, indicates that the retrocession market continues to be more vulnerable to instability, with this instability contributing an additional layer of fragility to the broader reinsurance ecosystem.