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 first catastrophe bond to be issued out of Hong Kong positions the emerging insurance-linked securities (ILS) domicile as a gateway to global institutional capital for China’s risk transfer and reinsurance needs, according to Aon Securities, who also highlighted that local investors participated in the transaction.
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Markel CATCo Investment Management, the in run-off retrocessional reinsurance manager of insurance-linked securities (ILS) funds, is to be the subject of Chapter 15 bankruptcy proceedings, with filings made in the United States that have also disclosed Danish pension fund investor PKA A/S as a major holder.
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The issuance of the first catastrophe bond through Hong Kong has helped to open up a new channel for risk diversification for the domestic catastrophe insurance market, according to the sponsor of the Greater Bay Re Ltd. (Series 2021-1), China Re Group.
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The very first catastrophe bond to be issued out of Hong Kong has now been completed, with a $30 million Greater Bay Re Ltd. (Series 2021-1) cat bond coming to market on behalf of sponsoring reinsurer China Re.
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United States governmental authorities have concluded their investigations into retrocessional reinsurance investment manager Markel CATCo this week, with no action set to be taken.
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Having announced this morning that a proposal has been made to investors to speed the running-off and return of capital of the Markel CATCo retrocessional reinsurance investment funds, the half-year report of the manager’s public fund suggests further wildfire subrogation related recoveries are possible.
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A new proposal from Markel CATCo Investment Management and Markel Corporation seeks to speed the return of capital from the CATCo retrocessional reinsurance investment funds to investors, while avoiding any complications to the ongoing running-off from legal claims made.
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The retrocession market failed to harden as hoped for through 2021, with in some cases rapid and material declines in pricing seen, especially in industry loss warranty’s (ILWs’), according to Guy Carpenter’s Sebastian Cook.
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The upward trajectory of rates on line will continue at the January 1st 2022 reinsurance renewals, including European accounts hit by losses this year, according to Sven Althoff, executive board member at Hannover Re.
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There is a clear and ongoing ‘flight to quality’ where ILS funds are concerned, according to Dirk Lohmann, Chairman and Flavio Matter, Head of Origination, ILS, at Schroders Capital.
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