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).
At the January 2025 reinsurance renewals broking group Howden estimates that risk-adjusted pricing for property catastrophe treaty business declined by 8%, while retrocession pricing fell further by 13.5%.
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Silk Road Re Limited, the debut catastrophe bond sponsored recently by Taiping Re and issued out of Hong Kong, has helped the reinsurance company achieve “effective diversification” within its catastrophe risk management, as it looks to pursue a dual-pillar protection approach of retrocession and insurance-linked securities (ILS), its CEO said today.
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Stone Ridge Asset Management, the New York based alternative risk premia focused investment manager, had another strong year for its reinsurance investment strategies and ventures in 2024, which CEO Ross Stevens describes in his latest investor letter while also explaining some of what makes the firm so interesting.
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An easing of conditions in the retrocession market has helped to bolster capacity in advance of the January 1st 2025 reinsurance renewals, resulting in a situation where capital was more than adequate to meet growing client demand, broker Aon has said today.
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Having recently secured its biggest catastrophe bond to-date, Fidelis’ new $375 million Herbie Re Ltd. (Series 2024-2) issuance enhances its reinsurance arrangements and supports the managing general underwriter (MGU) Fidelis Partnership to capitalise on catastrophe-exposed business opportunities, executives have said.
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QBE, the Australia headquartered global insurance and reinsurance group, has now secured its targeted $250 million of retrocessional protection from its first catastrophe bond sponsorship since 2013, as the Bridge Street Re Ltd. (Series 2025-1) issuance has now been priced roughly 14% below the mid-point of initial guidance, we are told.
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According to new survey data collected by the Bermuda Monetary Authority (BMA), Bermuda-based insurance and reinsurance companies made increased use of industry-loss warranties (ILW’s), quota share arrangements and retrocession in 2023.
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QBE, the Australia headquartered global insurance and reinsurance group, is now targeting reduced pricing for its first catastrophe bond sponsorship since 2013, with the spread guidance now lowered for the $250 million Bridge Street Re Ltd. (Series 2025-1) issuance, we understand.
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Fidelis Insurance has now secured its biggest catastrophe bond issuance, as the $375 million of Herbie Re Ltd. (Series 2024-2) notes have now been priced to provide the company multi-peril annual aggregate retrocessional reinsurance protection.
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As the running-off of the exchange listed CATCo Reinsurance Opportunities Fund, the stock exchange listed retrocessional reinsurance strategy operated by Markel CATCo, completed this year, the company has now revealed that the net asset value of the shares rose 52% just this year as additional positive loss development was experienced.
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