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).
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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Appetite for insurance-linked securities (ILS) investments is rising according to Twelve Capital’s Florian Steiger, who sees interest in catastrophe bonds as still strong despite recent tightening of spreads, while interest in peak peril private ILS and collateralised reinsurance is on the rise.
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This morning, German reinsurance giant Hannover Re noted the resurgent insurance-linked securities (ILS) market, highlighting that it has returned to growth after a few years where capital allocated to ILS and catastrophe bonds had declined a little.
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The high-levels of activity and investor interest in the catastrophe bond market has resulted in tightening of spreads for many issues this year so far, leading to some cat bonds becoming less attractive to invest in, as they no longer adequately compensate for the risk assumed, according to Dirk Schmelzer of Plenum Investments.
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Tremor Technologies, the insurtech with a technology-based programmatic insurance and reinsurance risk transfer marketplace, announced today that it can now provide re/insurers with optimised access directly to more than 95% of global reinsurance market capital, from across traditional and alternative or ILS fund sources.
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