Retrocession news

The retrocessional reinsurance market has become increasingly dependent on the capital markets and insurance-linked securities (ILS), with third-party capital providers beginning to dominate that sector and reinsurers increasingly utilising third-party capital backed retrocession.

The increased size of Markel CATCo Investment Management Ltd.’s assets under management, to which it added another $700 million to meet mid-year demand for its retrocessional reinsurance products, has helped the firm to underwrite a 30% larger mid-year book at the same rates as its January portfolio was secured.

Despite the constant reports of overcapitalisation in reinsurance, S&P reports that the top 20 reinsurance firms in the world have lost their capital redundancy at the ‘AAA’ confidence level for the first time since the financial crisis back in 2008.

The use of insurance-linked securities (ILS), catastrophe bonds and collateralized reinsurance has transformed the reinsurance market and conquered the property catastrophe space, according to S&P, providing companies with a lever to acquire premium growth while still managing and controlling their peak exposures.

Global reinsurance giant Munich Re has followed suit with much of the market, in electing to pass on more premiums to de-risk at a time when the improved market conditions have allowed it to grow its underwriting book on the front-end.

Akinova, a digital risk trading insurtech start-up that is developing a platform where insurance and reinsurance related risk can be traded, has added another senior advisor in Susan Estes, a Wall Street veteran, as well as co-founder and CEO of bond trading platform OpenDoor.

Reinsurance and retrocession linked specialist ILS investment manager Markel CATCo Investment Management has continued to deliver higher investment fee income to parent Markel Corporation in the second-quarter, as the increased assets under management contributed 87% more revenue this year.

Blue Capital Reinsurance Holdings Ltd., a unit of Sompo International Holdings Ltd., continued to feel the effects of hurricane Irma losses in Q2, but anticipates its underwritten portfolio producing a 100 basis point higher rate-on-line thanks to price improvements.

Bermuda headquartered pure-play reinsurance firm PartnerRe has significantly increased the amount of collateralized quota share retrocessional support its portfolio receives from the capital markets, with growth evident in the firms Lorenz Re sidecar vehicle at the mid-point of 2018.

Bermudian reinsurer and third-party reinsurance capital management firm RenaissanceRe has continued to increase the size of its collateralized reinsurance and retrocession vehicle Upsilon, issuing another set of shares to investors during the second-quarter, increasing the overall size of the vehicle to more than $1 billion for the first time.