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Reinsurance and Fronting

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Sufficient Capacity, Higher Premiums Mark Recent Reinsurance Renewals

Insurers were able to secure sufficient reinsurance capacity at June 1 and July 1 renewals as reinsurers benefited from replenished capital and prudent risk and cost management, according to Willis Re. Reinsurers' capital returned to a point that was just 5 percent below the level at the end of 2019.
July 06, 2020 Read More
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Fronting: An Essential Element of Many Captive Insurance Programs

Fronting arrangements are a necessary element of many captive insurance programs, but, though the mechanism is fairly commonplace, there are distinctions—including collateral requirements—among fronting insurers. There are a number of characteristics that distinguish one fronting insurer from another.
July 06, 2020 Read More
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Will Captives Benefit from the Hardening Market?

Conventional wisdom holds that hardening insurance and reinsurance markets benefit captive insurers, but that might not be the case this time. Here are three potential issues that could have a negative impact on captives as they look to benefit from rising commercial insurance prices.
June 29, 2020 Read More
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Rising Reinsurance Prices, Tighter Conditions Attracting New Capital

Reinsurance price hikes are drawing additional capital to the market amid the fallout from the COVID-19 pandemic, according to Fitch Ratings. In the current environment, there is potential for double-digit reinsurance price increases to extend into 2021, Fitch said.
June 29, 2020 Read More
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COVID-19 Pandemic Has an Impact on June 1 Reinsurance Renewals

June 1, 2020, renewals provided the first test of the COVID-19 pandemic's impact on reinsurance markets, resulting in property-catastrophe pricing increases.
June 24, 2020 Read More
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US Property-Casualty Reinsurers' First-Quarter Premiums Up from 2019

A survey of US property-casualty reinsurers showed the group's first-quarter net premiums written were up 20.4 percent from the same period in 2019. The Reinsurance Association of America survey of 17 US property-casualty reinsurers found the group wrote $16.5 billion of net premiums during the first 3 months of 2020.
June 03, 2020 Read More
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Reinsurance Sector Won't Earn Cost of Capital in 2020 Due to COVID-19

The global reinsurance industry will fail to earn its cost of capital in 2020 due to the impact of the COVID-19 pandemic, according to Fitch Ratings. Fitch noted that the COVID-19 crisis comes after 3 years of heightened natural catastrophe losses and increasing US casualty claims.
June 01, 2020 Read More
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S&P Revises Global Reinsurance Outlook to Negative on COVID-19 Impact

COVID-19 pandemic has led S&P Global Ratings to revise its outlook for the global reinsurance industry to negative from stable. S&P said that pandemic-related losses combined with volatile capital markets and lower investment returns will likely prevent the global reinsurance sector from meeting earnings expectations.
May 21, 2020 Read More
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Reinsurers Exposed to COVID-19 Losses but Appear Resilient to Pandemic

As both the human toll and the business impact of COVID-19 continue to mount, reinsurers look well positioned to ride out the pandemic. The industry entered the crisis well capitalized. It's also likely to benefit from policy exclusions that will limit some pandemic-related losses.
April 06, 2020 Read More
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Cat Bond, ILS Issuance Sets First-Quarter Record

The catastrophe bond and insurance-linked securities (ILS) market saw record first-quarter issuance of more than $5 billion, according to data compiled by Artemis. The first-quarter issuance was up 82 percent from the same period in 2019 and was 19 percent higher than the previous first-quarter record set in 2018.
April 03, 2020 Read More
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Ample Capital Should Help North American P&C Sector Weather COVID-19

Impact stress tests reflect that ample capital buffers at North American property-casualty insurers and reinsurers should make any fallout from COVID-19 manageable for those companies, according to S&P Global Ratings. Financial market turmoil and the ensuing recession pose a greater pitfall than underwriting exposure to COVID-19 pandemic risk.
March 31, 2020 Read More
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Fitch Ratings' Outlook for Reinsurers' Fundamentals Turns Negative

Fitch Ratings has revised its outlook for the underlying fundamentals of the global reinsurance sector to negative from stable due to increased concerns over COVID-19 and its related impacts on reinsurers' credit quality. Fitch's outlook for the ratings levels in the reinsurance sector remains stable, the rating agency said.
March 27, 2020 Read More
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ILS Market Has Been Tested by Losses but Continues To Grow

New issuance of catastrophe bonds and other insurance-linked securities (ILS) may vary from year to year, but over time the volume of reinsurance capital represented by the outstanding securities in the marketplace has steadily grown. In responding to losses, ILS have demonstrated viability as an alternative method of ceding risk.
March 16, 2020 Read More
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First Quarter Cat Bond, ILS Issue Volume on Pace To Set New Record

First-quarter catastrophe bond and insurance-linked securities (ILS) issuance is on a record pace, according to a report from Artemis. Anticipated first-quarter volume of $5.1 billion in new catastrophe bonds and insurance-linked securities is 84 percent higher than during the same period in 2019.
March 10, 2020 Read More
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RAA Praises US Budget Risk Transfer Amendment

The Reinsurance Association of America (RAA) is praising an amendment to a fiscal 2021 US budget document that encourages federal agencies and departments to take advantage of risk transfer options.
March 05, 2020 Read More
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Hard Market Draws Record Number to World Captive Forum

World Captive Forum attendees agreed that the hard insurance market is driving the substantial increase in interest in captive insurance companies, and Kirkway International’s Michael Woodroffe prescribes some practical reinsurance tactics to use in the hard market.
January 31, 2020 Read More
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Lloyd's "Blueprint One": A Critique

In this review and critique of the recently released Lloyd's "Blueprint One," a strategic plan for the future of the market, we offer commentary concerning how captive insurers may want to participate in this process. Additionally, we are seeking feedback from captives with their own thoughts of this process.
November 13, 2019 Read More
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Global Reinsurance Outlook 2020

A Standard & Poor's global reinsurance outlook for 2020 has implications for captives. We explore some of the threats to reinsurers and how captives may also face similar issues.
September 18, 2019 Read More
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How Do Captive Insurers Use Reinsurance?

A captive is an insurance or reinsurance company set up exclusively to insure or reinsure the risks of the group to which it belongs. A captive insurer may operate as a direct insurer or a reinsurer. Read on to find out more about how captive insurers use reinsurance.
May 20, 2019 Read More
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Synopsis: 2019 1Q Reinsurance Markets

This synopsis of the major reinsurance brokerage reports on the January 1 reinsurance renewals also includes the factors captives need to watch. Captive insurers should focus on three areas that bear continued surveillance.
April 29, 2019 Read More