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).
Paul Gregory, Chief Underwriting Officer (CUO) of insurance and reinsurance firm Lancashire Holdings Limited, has revealed that the company wrote a smaller retro book at the January 1st 2025 reinsurance renewals, which according to the CUO, resulted in a marginally better outcome for the organisation.
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Speaking during Hiscox’s full-year 2024 earnings call, Joanne Musselle, Group Chief Underwriting Officer (CUO), said the company made significant savings on its retrocession placement at the 1/1 renewals, then allocated some of those savings to support its recent $200 million Ocelot Re Ltd. (Series 2025-1) catastrophe bond.
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The ILS Advisers Fund Index has reported a -0.38% return for January 2025 on the back of the recent California wildfire losses. With 75% of ILS fund managers having reported returns for the period so far, the Index could fall further as additional data points from private ILS strategies are included.
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UK government backed mutual terrorism reinsurance firm Pool Re has secured another increase in size to its retrocession program, lifting it by 15% from £2.4 billion to £2.75 billion at the latest renewal, while our sources suggest that a new vintage of the Baltic terrorism catastrophe bond is expected to add to this.
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Munich Re has renewed its retrocessional reinsurance program arrangements to provide $1.55 billion in protection for 2025, utilising both traditional retro and capital markets through its sidecars and catastrophe bonds at a stable level with the prior year.
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AXIS Capital, the global specialty insurance and reinsurance underwriter, has returned to the catastrophe bond market aiming to secure $150 million or more in North American named storm and earthquake protection from a Northshore Re II Ltd. (Series 2025-1) issuance, Artemis has learned.
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Enstar, the legacy and run-off reinsurance specialist, has said that it acquired a Bermuda based Class 3B reinsurer in its most recently announced legacy transaction focused on property insurance-linked securities (ILS), for approximately $46 million.
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Aeolus Capital Management Ltd., the specialist insurance-linked securities (ILS) and reinsurance investment manager, has announced the appointment of Giorgio Scrocca from OdysseyRe in London as Assistant Vice President (AVP), Underwriting.
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Similar to the catastrophe excess of loss marketplace, the retrocession market softened to a degree at the January 1st, 2025, reinsurance renewals, and was generally more responsive to Bermuda-based reinsurer Conduit Re’s needs, according to Chief Executive Officer (CEO), Trevor Carvey.
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According to global insurance and reinsurance broking group Aon, the healthy retro reinsurance market helped bolster reinsurance capacity at the key 1/1 renewals, while catastrophe bonds provided “significant competitive pressure” during the January renewal period.
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