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).
Some catastrophe bond funds have been able to moderate the impacts of broadly widening spreads through their diversification in recent weeks, with diversifying perils and regions experiencing less significant widening on outstanding cat bonds, so delivering better returns in May and June.
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As the retrocessional reinsurance marketplace remains capacity constricted, especially for lower down and catastrophe exposed attachments, the market has seen a resurgence in demand for weighted industry-loss warranty (ILW) products, according to Gallagher Re.
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Isosceles Insurance Ltd., the Bermuda-domiciled private insurance-linked securities (ILS) and catastrophe bond platform operated by Marsh McLennan and reinsurance broker Guy Carpenter, has completed the issuance of three new series of cat bond notes, totalling $90.5 million of capital markets backed capacity secured for clients.
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Specialty insurance and reinsurance underwriter the Canopius Group has now secured its first ever 144A catastrophe bond, after the debut Finca Re Ltd. (Series 2022-1) transaction priced to provide the company with $75 million of peak US catastrophe reinsurance protection.
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Rate increases secured by insurance-linked securities (ILS) funds and collateralized reinsurance vehicles at the mid-year reinsurance renewals are likely to be higher than had been expected when the negotiations began, sources have told Artemis.
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Lockton Re, the reinsurance arm of the global broker, has announced the hiring of Kathy McCann from Guy Carpenter, a property reinsurance and retrocession specialist.
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Global specialty insurance and reinsurance underwriter AXIS Capital has now secured its latest catastrophe bond at attractive terms, with the upsized $140 million of peak-peril catastrophe reinsurance protection from its new Northshore Re II Ltd. (Series 2022-1) catastrophe bond issuance coming at a reduced pricing level.
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The catastrophe bond market, which has experienced a prolonged period of spread widening through much of the second-quarter, is now seemingly becoming more balanced, as a greater equilibrium between supply and demand is found, resulting in more attractive execution for four recent cat bond sponsors.
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AXIS Capital, the global specialty insurance and reinsurance underwriter, is now aiming to secure an upsized $140 million of peak-peril catastrophe reinsurance protection from its new Northshore Re II Ltd. (Series 2022-1) catastrophe bond issuance.
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Global insurance and reinsurance company Everest Re is set for a successful new catastrophe bond issuance, with the Kilimanjaro III Re Ltd. (Series 2022-1) transaction now having priced at the upsized $300 million, with a coupon fixed at the mid-point of initial guidance.
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