Retrocession

More retrocession capacity is likely to be deployed during 2023 as pricing holds up across the primary, reinsurance and retro markets, according to Conduit Re.

The intermediary recorded “one of the hardest reinsurance markets in living memory” as primary rate increases slowed.

The deal protects the carrier’s capital in the event of large nat-cat or mortality losses.

The exit highlights increasingly difficult conditions in the retro and reinsurance markets.

The carrier has become the latest in a string of reinsurers unwilling to write retro at 1 January.

The RenRe vehicle, formerly a major retro writer, has been a reduced force this year.

It is understood that Ascot will continue to write worldwide retro business.

Inflation, heightened cat activity and years of poor reinsurance returns are fuelling demands for wholesale change in the European market.

Fidelis and MS Reinsurance are among the ceding companies that have support from Ajit Jain’s unit.

Kevin O’Donnell also said 1.5-point rises in ceding commissions for long-tail line treaties were an “acceptable” increase in acquisition costs, given improved underlying profitability.

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Greater participation of cat bond investors in the retro market has some advantages alongside the risks.