All of our news and analysis on the retrocessional reinsurance marketplace.
Retrocession is effectively reinsurance for reinsurers, so a tertiary layer of risk transfer away from the original risk, if you consider primary, reinsurance and then retrocession.
As reinsurance is insurance for insurers, retrocessional, or retro, protection is reinsurance for reinsurers.
The retrocession reinsurance market has increasingly come to depend on the capital markets and insurance-linked securities (ILS).
As of mid-year 2022, global retrocession capacity has been estimated to be as high as $60bn, around $20bn of which is indemnity based and the rest in other formats.
The alternative capital markets and ILS funds, or investors, play a significant role in global retrocession, as too do instruments such as catastrophe bonds and industry-loss warranties (ILW).
Insurance-linked securities (ILS) investment manager Nephila Capital is targeting growth and expansion into the climate and specialty risks sides of its business, but property catastrophe risk remains the biggest revenue driver at this time, Markel’s Jeremy Noble said today.
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At the key January 1st reinsurance renewal season, RenaissanceRe, the global reinsurance firm and third-party capital manager, purchased more retrocessional protection that had been anticipated, according to CEO Kevin O’Donnell.
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Nephila Capital, the flagship insurance-linked securities (ILS) fund management operation owned by Markel Corporation, has experienced another 8% decline in assets under management during the fourth-quarter of 2022, with the total falling to $7.2 billion.
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With the key January reinsurance renewals having been challenging and characterised by reduced capacity and higher pricing, the focus can often turn to buying hedges such as industry-loss warranties (ILW’s), but a new study highlights some issues investors should be aware of.
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Global reinsurance firm Hannover Re has increased its net major loss budget for 2023 to EUR 1.725 billion, citing growth in its P&C reinsurance book and an “increased loss expectation from natural catastrophes” as the drivers.
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Some of the side-pockets established by insurance-linked securities (ILS) funds in the wake of hurricane Ian are now being reduced in size, as estimates from the storm continue to trend lower than originally expected, according to Artemis’ sources in the ILS investment community.
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K2 Advisors, the hedge fund focused investment management unit of Franklin Templeton, has become even more constructive on the insurance-linked securities (ILS) asset class, seeing near record high catastrophe bond spreads, as well as improved conditions in private ILS, retrocession and industry loss warranties (ILW’s).
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In the global retrocessional reinsurance market, the availability of aggregate covers had been shrinking for some time, but at the January 2023 renewals aggregate retro capacity supply shrank further, while the terms of protection continued to become more restrictive, broker Gallagher Re has said.
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Bermuda-headquartered reinsurance company Conduit Re significantly expanded its portfolio at the January 2023 renewal season and the company also expanded its panel of retrocessionaires and outwards reinsurance limit at 1/1.
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Catastrophe bonds represent a growing portion of the alternative reinsurance capital market at this time, with their perceived benefits for investors helping to promote expanding growth of this segment, Fitch Ratings has said.
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