Given where the retrocession market is positioned and the very fact retro strategies are actually less exposed to lower industry-loss level events, we could see more capital coming to support that segment, but Gregory Roberts, CUO of Conduit Re doesn’t expect capital providers risk appetites to alter.

Speaking during a media call today, after Bermuda-based reinsurance company Conduit Re reported a 30.3% increase in reinsurance revenue to $588.2 million for the primary nine months of 2024, the Chief Underwriting Officer provided some insights into retrocession market conditions.

Gregory Roberts first commented on retro market positioning, which has adjusted in-line with the reset seen across all the reinsurance market over the past couple of years.

“I believe the retro market has positioned itself at an industry-loss level which could be very sustainable from their perspective, within the management of expectations from their stakeholders,” Roberts explained.

“That’s across traditional balance sheets, in addition to specialist capital from third-party capital, typically the ILS markets and index trades, just like the cat bonds,” he said.

Roberts went on to spotlight that, after this reset retrocession portfolios and investment strategies have seen improved returns.

The Conduit Re CUO commented, “I believe the product’s well demonstrated. It’s clearly, largely well-away from the activity again to date for this 12 months, though the 12 months is just not complete.”

Adding, “So, I expect probably more capability to be available in that end of the spectrum. But I don’t see a shift in riskiness and risk appetite of that capital.”

Which suggests, once more, that attachment levels may prove largely sticky again at the top of 12 months retrocession renewals.

Roberts closed by saying on retrocession that, “Possibly there’s an effect there on pricing, but give or take, I see it as a reasonably stable market again.”