Posts Tagged ‘retrocession’



February 8th, 2010

Property Retrocession Renewals

Posted at 11:11 AM ET

The property retrocession market renewal customarily closes late and the 2010 season was no exception. Buyers generally prefer to wait to ensure that they have the best possible view of their own inwards portfolio exposures before proceeding to purchase. A late, speedy renewal is possible because of a number of factors including uniformity of required data; the relatively small size of the market; a quick execution period and a reduced number of buyers coming to market at this time of the year.

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February 3rd, 2009

A Tight Retro Market at 1/1

Posted at 1:00 AM ET

Christopher Klein, Managing Director
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A late treaty retrocession renewal was characterized by reduced capacity and higher prices. Buyers grappled with uncertainty concerning their risk mitigation requirements, based on inward writings and an extremely limited market - especially for standard Ultimate Net Loss (UNL) retrocession protection. Although Hurricane Ike resulted in only a partial loss of limits by reinsurers (as with Hurricane Katrina), the retrocession market was unable to replenish balance sheets via sidecar capacity - as a result of the financial catastrophe. Consequently, the upward pricing reaction was more pronounced than in other sectors, and it was particularly difficult to find capacity for losses related to Hurricane Ike.

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February 3rd, 2009

Chart: Retro ROL at 1/1

Posted at 12:58 AM ET

A late treaty retrocession renewal was characterized by reduced capacity and higher prices. Buyers grappled with uncertainty concerning their risk mitigation requirements, based on inward writings and an extremely limited market - especially for standard Ultimate Net Loss (UNL) retrocession protection.

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January 14th, 2009

International PA Renewal at 1/1

Posted at 1:00 AM ET

Shaun Scade, Managing Director
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The non-U.S. personal accident (PA) market was not isolated from the effects of the global financial catastrophe. The January 1, 2009 renewal was framed by discussions concerning the cost of capital, liquidity, and investment returns. Reinsurers generally initiated these conversations with the hopes of using asset impairment issues to secure better pricing. Nonetheless, cedents were able to resist rate increases-for some lines, rates even dropped slightly.

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January 5th, 2009

Cats and Credit Push Prices Up

Posted at 1:00 AM ET

Global Reinsurance Review January 2009

Reinsurance rate increases were moderate on average at the January 1, 2009 renewal. The Guy Carpenter World Rate on Line (ROL) Index rose 8 percent, in response to the dual pressures of a financial catastrophe and the second most expensive property catastrophe year on record. The degree to which prices increased was tempered by large capital positions at the beginning of 2008, enabling carriers to absorb the year’s losses, but this is where the generalizations end. Loss history, geography, and line of business led to wide differences in pricing. Expectations of another above-average storm year and the uncertainty surrounding the credit crisis underscore the need for continued capital management discipline in the coming year.

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October 19th, 2008

Sidecars Have a Specific Role to Play

Posted at 6:37 PM ET

Christopher Klein, Global Head of Business Intelligence
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The popularity of sidecars seems to have ended. The availability of traditional capital and access to insurance-linked securities (ILS) and other alternatives simply has made sidecars less attractive. But, reinsurers know that the market can harden at any time, with one mega-catastrophe creating near-immediate demand for fresh capital. Low overhead and an inherent exit strategy are likely to help these vehicles regain prominence in the next hard market—with investors and reinsurers alike.

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