The use of collateralized retrocession limits has increased among the largest reinsurance companies as alternative capital continues to be a critical source of retro protection, but for some retro buyers the cost of coverage remains too high, S&P Global Ratings has said.
In fact, across reinsurance companies analysed by S&P, their January 1st 2024 in-force books suggests a decreased use of retrocession, with higher costs the main driver.
The rating agency explained, “Data from Jan. 1, 2024, in force book suggests that reinsurers are slightly scaling back their use of retrocession for tail risk, driven by increasing cost.
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