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).
Thanks to improved conditions in the global reinsurance and retrocession market, Hiscox Group reported this morning that its Hiscox Re & ILS unit has underwritten some 35.6% more in net premiums during the first-quarter of the year.
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Global reinsurance firm Hannover Re has reported strong growth in premiums written of almost 17% on an adjusted basis for the first-quarter of 2021, with growth also continuing at the April renewals when a further 7.4% has been reported.
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Nephila Capital is experiencing elevated costs as the insurance and reinsurance linked investment manager builds-out and grows its managing general agency (MGA) platforms and readies for the launch of new ILS fund vehicles, Markel Co-CEO Richie Whitt has explained.
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Opportunities in certain areas of reinsurance and retrocession are in some cases the best seen in years, which has helped Lancashire Holdings third-party capital collateralised reinsurance arm write what could be its best portfolio since inception.
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Specialty insurance and reinsurance group Lancashire Holdings experienced some of the strongest growth in the firms history in the first-quarter of 2021, nearly doubling its P&C reinsurance premiums written during the period.
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Assets under management (AuM) at the largest dedicated insurance-linked securities (ILS) specialist manager Nephila Capital fell slightly to $9.5 billion at the end of the first-quarter, with the reduced assets also a driver of lower ILS operating revenues at Markel Corporation.
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Reinsurance capacity remains adequate and demand for protection globally remains high, according to executives at Marsh McLennan and Guy Carpenter, but Florida is a “different animal” according to GC CEO Peter Hearn.
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Despite some price tightening, following inflows of new capital, catastrophe bond spreads remain attractive at this time compared to corporate high yield bonds, according to hedge fund specialist manager K2 Advisors.
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Vantage Risk has now secured its first catastrophe bond at the upsized $225 million target, an increase of 50%, while the pricing for its Vista Re Ltd. (Series 2021-1) cat bond issuance has now been fixed 10% below the mid-point of initial coupon guidance.
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Vantage Risk’s target for its first catastrophe bond has been lifted by 50%, as the recently launched Vista Re Ltd. (Series 2021-1) cat bond issuance looks set to hit $225 million in size, while at the same time pricing looks likely to come in at the bottom of, or below, guidance.
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