RenaissanceRe is one of 20 reinsurers backing a new $400 million syndicated reinsurance facility launched by Willis Re that is designed to offer insurers protection against catastrophic and systemic loss accumulations arising from liability portfolios.
Named PRIMO, Willis Re said the facility is a response to increasing concerns around accumulation and systemic risk at a time when insurers are retaining more liability exposure than ever before. It can help to manage expected loss and magnify unexpected systemic exposures and accumulation risk in an increasingly complex and interconnected world, it said.
Initially supported by 20 reinsurers, the new global facility is an industry-first for casualty cover in providing over $400 million of reinsurance capacity worldwide on the basis of pre-agreed contract wording.
In addition, PRIMO will streamline the process of building reinsurance to address complex tail exposure.
John Cavanagh, global CEO of Willis Re, said: “PRIMO builds on over 25 years of continuous research and development since its precursor was developed in the late 1980s. Willis Re can now offer our diverse and global clients a tried and tested reinsurance solution protecting against events that impact multiple accident years, create quarter-on-quarter earnings pressure and represent a significant unknown in terms of quantum from the time the event is discovered until it becomes a paid loss.”
Andrew Newman, head of Global Casualty at Willis Re, said: “While the first-party risks from earthquake, wind, flood and other manmade perils are well served by property catastrophe reinsurance markets, until today third-party casualty risks have been considerably less well served.
“While conventional clash reinsurance products can respond well to certain threat scenarios such as industrial accidents, or earthquake threat to workers compensation, they are not designed to and do not offer broad systemic protection. Now, for the first time, meaningful catastrophic reinsurance protection is available, and affordable, for writers of casualty business, including all financial and injury-based lines.”
David Marra, chief underwriting officer – casualty & specialty, RenaissanceRe, said: “We are pleased to support the evolution of the PRIMO facility to offer meaningful casualty catastrophe coverage to P&C companies around the world. RenaissanceRe has been involved with its precursor for over 10 years as it responded to catastrophic casualty events, and we are delighted to bring solutions to a wider number of clients through PRIMO.”
Simon Bird, head of casualty treaty at Brit Syndicate 2987, said: “The PRIMO facility demonstrates the ability of the reinsurance market to offer both significant capacity in terms of quantum and a structure designed to give broad coverage. As such it delivers a meaningful tool whereby casualty aggregations, both known and unknown, can be more effectively managed.”
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