Initially, insurance companies sought partnerships with reinsurers in order to obtain protection or financing for the risks they were underwriting.
However, the role of reinsurance is continuously expanding and, in the current market circumstances, reinsurers propose a growing range of products that not only cover risks, but also offer financial solutions (especially for life businesses). It is also common to sell specific packages to improve the capital management of ceding companies.
Furthermore, in the current actual low interest rate environment we note the continuous development of the ILS market to which reinsurers contribute significantly as they are often sponsors of SPVs issuing mortality or CAT bonds. This product offers higher yields as the coupons are largely superior to risk free rates.
Given the above, we consider that a benchmark study targeting this specific market could give an insight and provide a better understanding of the reinsurance business.
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