Retrocession is back in fashion as market conditions evolve across reinsurance and rating agency S&P believes retro buying is set for a comeback, as reinsurers recognise favourable pricing and conditions for protection, while looking to manage their catastrophe limits in a softening market.
S&P Global Ratings highlights that “catastrophe risk appetite could become more subdued through 2027 due to softening reinsurance pricing,” but said that natural catastrophe risk in the sector remains under control, as reinsurers adopt a measured approach to growing in property risks.
“Although we expect pricing for this business to continue softening, we project the industry’s benchmark group will retain capital levels commensurate with our ratings on them,” the rating agency explained.
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