Creating new risk retention norms

In the current excess and surplus (E&S) insurance landscape, the industry is grappling with a significant challenge: a lack of reinsurance capacity. With reinsurers prioritising protecting and optimising their capital, 1/1 renewals have been the most challenging in many years. This issue is not only impacting the market’s robustness but also affecting the dynamics of risk retention in the sector.

The current reinsurance market is characterised by all-time high rates and tightening terms and conditions. Fitch has estimated a 20 to 60 percent rate increase for cedants in the overall property reinsurance market at the 1/1 renewals. Such developments have amplified the need for greater risk retention from carriers.

Higher retention levels