Reinsurance increasingly the cheapest form of capital
Wednesday, 07 27 2016, Category: Insurance and Reinsurance, Country: World
The steady fall in the cost of reinsurance coverage has now typically made it the cheapest and most efficient form of contingent capital, when compared to ceding companies equity, debt and own capital, according to a new study from JLT Re.
The reinsurance broker has published a detailed look at the cost and efficiency of reinsurance capital, which suggests that by strategically making use of efficiency reinsurance ceding companies can increase their franchise value and improve their regulatory capital positions.
However, despite the efficient cost and performance of reinsurance capital within the overall re/insurance capital model, carriers are not all taking up the opportunity to become better protected or to use reinsurance more strategically.