In the first paper, we examine the supply and demand dynamics of property aggregate reinsurance and how it can benefit insurers.
Aggregate coverage was once a mainstay of property reinsurance structures, helping insurers to manage losses caused by the rising cost of catastrophic events such as severe convective storms and wildfire, which were assaulting their results.
However, continued losses amid the increasing frequency of smaller catastrophe events, as well as the effects of COVID, challenged the profitability of such structures and most were recognized as unsustainable for reinsurer appetite. As a result, all-perils property aggregate reinsurance was almost completely withdrawn from the market.
Now, with an increasing amount of reinsurance capital available, as explored in our most recent Reinsurance Market Report, and an increased focus on data and analytics, aggregate is back — albeit in a much more sustainable form.
In this whitepaper, our property specialists explore:
- The recent history of property aggregate
- Market factors that have contributed to the return of aggregate capacity
- The difference between today's aggregate capacity and what came before
- How property aggregate can benefit cedants
- The importance of data and analytics when considering aggregate structures
- What cedants should consider when opting for property aggregate coverage
