LONDON, UK, MARCH 2017 – The 20 largest European cedants have continued to buy more reinsurance as soft market conditions prevail, although the pace at which retention ratios are falling has been more subdued, according to A.M. Best. In the new Best’s Briefing, titled “European Cedants Continue to Increase Reinsurance Buying but Demand for Cover Slows”, A.M. Best notes higher cession levels have been driven by a diverse range of factors, including regulatory demands under Solvency II and the need to support product diversification – including new lines of business.
The findings follow A.M. Best’s most recent examination of the reinsurance purchasing trends of European insurers ceding the highest amount of non-life premiums based on companies’ full-year 2015 and 2016 interim data (where available). In 2015, total non-life premiums ceded for the 20 largest European cedants rose by 17.9% to EUR 44.2 billion while gross premiums written (GPW) increased during this period by only 6.2% to EUR 333.3 billion. For the 15 companies where data were available, demand for reinsurance continued in the first half of 2016 but was not as pronounced. Premiums ceded increased 3.0% to EUR 21.9 billion, while there was, in fact, a 1.3% decrease in GPW to EUR 154.1 billion.
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