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).
Analysts at investment bank Jefferies have questioned the diverging strategies of two of the largest reinsurance companies, Hannover Re and SCOR, pointing out that the former is retaining more catastrophe risk, while the latter is reducing, but the analysts suggest that, in a hardening market, it’s time to make hay.
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International specialty insurance and reinsurance group Chaucer plc has renewed its fully collateralised reinsurance sidecar vehicle for 2022, adding new third-party investor capital to support its reinsurance underwriting at Lloyd’s, Artemis has learned.
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Global reinsurance company SCOR appreciates diversity within its retrocessional reinsurance panel, but aims to keep a roughly 50/50 mix, between ILS and traditional limit, as it appreciates both the mix of products and long-term relationships available, Jean-Paul Conoscente, CEO of SCOR Global P&C said yesterday.
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At the end of last year and around the key reinsurance renewal season, catastrophe bond funds and cat bond investors showed both their strong appetites for assuming risk, as well as some caution when it comes to risks that are less frequently seen in the cat bond market, investment manager Plenum explained.
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France-headquartered global reinsurance firm SCOR has reduced its natural catastrophe exposure at the January renewals and managed a challenging retrocession market through the use of third-party capital and upsizing its sidecar capacity to US $300 million.
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In a new report, analysts from Moody’s Investors Service explained that the just completed January renewals, alongside market conditions and forces, confirm its expectation that prices will rise further in 2022.
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The CATCo Reinsurance Opportunities Fund Ltd., the listed, retrocession focused insurance-linked securities (ILS) fund strategy managed by Markel CATCo Investment Management, has recovered more value for its investors, with favourable development related to 2017 and 2018 catastrophe loss events.
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Markel CATCo Investment Management has announced a sweetening of the terms of the buyout process for its retrocessional reinsurance investment funds, after a settlement was reached and more investor support for its winding down was received.
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Markel Corporation has full-confidence in the ability of its insurance-linked securities (ILS) specialist manager Nephila Capital to deliver results over the long-term and looks forward to realising more synergies with the ILS operation, according to Co-CEO Richie Whitt.
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Hannover Re faced more challenging market conditions when placing the renewal of its retrocession program at 1/1, resulting in a shrinking of protection, with its capital markets backed K-Cessions quota share sidecar facility declining 26% to around $450 million.
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