Is today the right time to assume retro risk?

Sep 2013

The theme of this year’s Monte Carlo was ILS and the new capital markets capacity entering the reinsurance and, in particular, the retro markets. This memorandum provides some background into retro as compared to the other key areas within the industry, including cat bonds, and touches on some of the pitfalls within it. It shows why today, with capacity piling in, premiums falling and coverage broadening, one should be very careful when assuming retro risk.