In today's evolving risk landscape, insurers face increasing challenges from frequent, smaller catastrophe losses that can disrupt earnings and financial stability. As the reinsurance market adapts, multi-year spread-loss (MYSL) solutions are emerging as a compelling alternative to traditional annual reinsurance. Popular in Europe, well-established in APAC, and gaining traction in the US, these structured solutions offer insurers a way to manage volatility, protect earnings, and maintain stability in a cost-effective manner.
This whitepaper explores how MYSL solutions work and why they are uniquely positioned to address the needs of insurers in a rapidly changing market. Unlike conventional annual reinsurance, MYSL solutions spread the cost of retained losses over multiple years, providing time diversification and risk financing. This approach not only helps insurers maintain lower retentions but also offers economic incentives, such as profit commissions, when loss experience is favorable.
Key benefits include:
- Volatility management: Smooth financial performance by spreading losses over time
- Cost efficiency: Potential for lower net costs through profit commissions and stable pricing
- Flexibility: Options to cancel or continue contracts annually, depending on loss activity
- Stability: Guaranteed terms and capacity over multi-year periods, even in loss scenarios
As insurers prepare for upcoming renewals, structured solutions like MYSL provide a strategic tool to navigate market challenges, manage attritional losses, and enhance financial resilience. Gallagher Re's specialists are here to guide you through these innovative solutions, helping you achieve your goals in today's dynamic reinsurance landscape.
View the full whitepaper to explore how structured solutions can help you smooth the spikes and secure long-term stability.