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Reinsurance and Fronting

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COVID-19, Changing Risks Will Add Complexity to Reinsurance Renewals

January 1 reinsurance renewals and related negotiations will likely be lengthier and more complex than in prior years, according to a new report from Guy Carpenter. The intermediary cites several factors that will contribute to the complexities around coming renewals, including slow and uncertain COVID-19 loss development.
November 25, 2020 Read More
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Insurance-Linked Securities Market Demonstrates Resilience: Survey

The insurance-linked securities (ILS) market has demonstrated resilience despite a number of significant tests over the past 3 years, a new report suggests. More than half of reinsurance and insurance companies now use ILS capacity, according to the Willis Towers Watson report.
November 23, 2020 Read More
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9-Month Results Show Reinsurers' Pandemic Losses Starting To Fade

The results of 4 major European reinsurers through the 1st 9 months of 2020 are showing that pandemic losses are beginning to fade, according to Fitch Ratings. Event cancellation coverage was the only affected business line that required major adjustments to expected claims, the rating agency said.
November 20, 2020 Read More
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Reinsurance Sector Faces Challenges but Is Positioned To Address Them

The global reinsurance industry clearly faces a number of significant headwinds, but offsetting positives justify a stable outlook for the sector, according to A.M. Best. Among the challenges confronting the reinsurance industry is uncertainty over potential COVID-19-related reinsurance losses from specialty insurance classes.
September 21, 2020 Read More
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COVID-19 Impact Could See Major Catastrophe Testing for Some Reinsurers

A major catastrophe combined with the impact of the COVID-19 pandemic could prove to be a capital event for some reinsurers, according to a new comment from S&P Global. Insured losses and investment volatility related to the COVID-19 pandemic have already eroded much of the global reinsurance industry's earnings buffers.
September 11, 2020 Read More
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Reinsurance Sector's Stable Outlook Reflects Balance of Offsetting Forces

A.M. Best says its stable outlook for the global reinsurance industry actually reflects positive and negative forces that are offsetting one another as reinsurers deal with the COVID-19 pandemic. The rating agency offered its annual commentary on the reinsurance sector in a report, "Global Reinsurers Maintain Equilibrium through COVID-19 Turbulence."
September 04, 2020 Read More
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California Wildfires Could Lead to Further Reinsurance Rate Increases

This year's California wildfires could lead to further increases in reinsurance rates, according to a new commentary from A.M. Best. Given the extensive use of reinsurance by insurance companies with property exposures in California, the 2020 wildfires may spur additional reinsurance and retrocession market rate hikes along with capacity shifts.
September 01, 2020 Read More
  Word Resilience on a Road Sign with Brown Grass and Mountains in Background

Reinsurers' First-Half Capital Shows Resilience with Slight Increase

An estimate calculated by Guy Carpenter and A.M. Best suggests that reinsurance capital demonstrated resilience at the end of the first half of 2020, showing a marginal increase of 1 percent from year-end 2019. Recovering financial markets and asset valuations during the second quarter helped shore up reinsurers' capital base.
August 26, 2020 Read More
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Despite COVID-19, ILS Market Sees $6.8 Billion in First-Half Issuance

The insurance-linked securities (ILS) market saw nearly $6.8 billion in new issuance during the first half of 2020, up from $5.5 billion during the period last year, according to a market update from Swiss Re. First-half issuance included a record-breaking nearly $4.0 billion in first-quarter issuance.
August 19, 2020 Read More
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Major European Reinsurers' First-Half 2020 Results Show Pandemic's Impact

The first-half 2020 results of four major European reinsurers revealed considerable pandemic-related claims, although the reinsurers' capital remained resilient, according to Fitch Ratings. The rating agency said the reinsurers' credit fundamentals were mostly in line with its assessment at the beginning of the pandemic, although pandemic-related losses were larger than anticipated.
August 14, 2020 Read More
  Steven Bauman, head of global programs and captive practice in North America, AXA XL

Using Captive Insurance as Part of a Global Risk Management Strategy

There is a long history of organizations using captive insurance companies to enhance their global risk management strategies. From a risk management and regulatory perspective, proper coordination of a global insurance program is vital for the overall organization. Steven Bauman of AXA XL explains in this new Captive Thought Leader video.
July 22, 2020 Read More
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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
  Word Resilience on a Road Sign with Brown Grass and Mountains in Background

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