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).
Tremor Technologies, the insurtech with a technology-based programmatic insurance and reinsurance risk transfer marketplace, said today that it now counts 33 Lloyd’s of London syndicates among the risk capacity providers signed up to its platform.
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Catastrophe bonds sponsored by specialty insurance and reinsurance company Fidelis Insurance Holdings Limited have been marked down by as much as 10%, or slightly more, as industry loss expectations for hurricane Ida rise, while some of the other exposed cat bonds have also seen more price declines.
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The retrocessional reinsurance investment portfolio constructed by Markel’s CATCo Investment Management is continuing to develop more favourably than had originally been expected, with the firm reporting a reduction of claims in relation to catastrophe events from 2017.
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The collateralized reinsurance market is estimated to have grown to around US $50 billion by the end of the first-quarter of 2021, with capacity having increased slightly following a more challenging period, according to AM Best.
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The main mutual insurance-linked securities (ILS) and reinsurance linked mutual investment funds have experienced some declines in the wake of the recent landfall of major hurricane Ida.
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French reinsurance company SCOR “kicked itself” for not having renewed its mortality catastrophe bonds in the past, the firms new CEO Laurent Rousseau explained today.
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Having visited the Lloyd’s insurance and reinsurance market last week and spoken with some of its major players, analysts at peel Hunt concluded that with the renewals approaching talk of rate reductions are now “out of the window.”
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As third-party or alternative capital managed continues to grow for global reinsurance firm Swiss Re, the company is keen to stress that this doesn’t mean any changes to its underwriting approach and standards, Philipp Rüede told us.
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Reinsurance companies have almost completed an evolution of their business models to enable them to coexist with alternative capital and insurance-linked securities (ILS), according to Moody’s, but the rating agency noted that there are risks to this engagement.
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Equity investors focused on the reinsurance sector question whether insurance-linked securities (ILS) deliver cost-of-capital benefits, while also finding it hard to consider reinsurers an ESG appropriate investment, Andrew Ritchie, Partner, Insurance Research at Autonomous Research LLP said today.
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