Signal Iduna Reinsurance Ltd.(SI Re), the Swiss based reinsurer, has reported that while the reinsurance industry experienced an orderly renewal season in January, the strong performance of the insurance-linked securities (ILS) market helped to reopen the retrocession market during the key renewals.SI Re often invests in select ILS structures, as a way to expand its diversification and gain access to global sources of risk.The reinsurer grew its underwriting portfolio by 10% in premium volume terms at the renewals, reaching EUR 225 million, as the company managed to capitalise on “carefully cultivated business opportunities, its strong standing with clients, and its recent Fitch ratings upgrade to “A”.

According to the reinsurer, new business contributed a premium volume of roughly 20% to the business written in the January renewals.SI Re grew its underwriting portfolio by 2% in premium volume terms, while the company also re-underwrote around 16% of its third-party property and casualty business.Bertrand R.

Wollner, Chief Executive Officer of SI Re, commented: “SI Re accomplished yet another highly successful renewal.SI Re’s prudent underwriting over the years enabled us to expand our portfolio during this hard market maintaining our focus on sustainable and long-term partnerships while not compromising on underwriting discipline.“Thus, SI Re was able to further solidify its profitable book of business and its standing in the market.

Also, the disciplining of the insurance value chain, which commenced in the retro-market in 2022 has reached the original markets, resulting in tighter terms and conditions and higher rates throughout the risk-transfer chain.” Robert Salzmann, Chief Underwriting Officer of SI Re, added: “Recognising our disciplined expansion in previous years, Fitch Ratings upgraded SI Re to ‘A’ stable last August.This milestone facilitated access to new business and clients who were previously less familiar with our longstanding mutual setup.This supports the growth of our book in markets and segments with an attractive return profile while further diversifying our existing book.

In addition, we continued to reduce volatility in our book of business by carefully adjusting our exposure to control accumulations.“Furthermore, through our complementary structured ILS portfolio we enable global diversification while our assumed reinsurance business remains focused on Europe.” Going back to the January renewals, SI Re said, “In the year-end negotiations, the reinsurance market experienced an orderly renewal.Although the macroeconomic and geopolitical environment remained challenging in 2024, inflation calmed down while capital markets performed favourably.” The reinsurer also highlighted how losses from natural catastrophes of around USD 150 billion remained at record level.

The firm also noted that with inflation now moderating, insurers were able to keep up with inflationary trends, but also strengthen their portfolios by enforcing adequate rates and sustainable conditions for their policyholders.“Overall, this results in a strengthening of the markets’ resilience and its ability to absorb and recover from losses more effectively and to manage insurers’ retention levels that have moved up during the hard market.Investor confidence rebounded and with the strong performance of the ILS market, the retrocession market reopened,” SI Re added.

“This recovery in risk capacity contributed to moderate price adjustments during this year’s renewals, albeit under disciplined conditions.Thus, the tightening of the original markets has brought the disciplining of the insurance value chain, which started in 2022 with the dislocation of the retrocession market, to full circle.” Additionally, SI Re explained that it continued to strengthen the profitability of its book during 1/1, while simultaneously reducing volatility.As quota share programmes were further scaled back, the company managed to grow its non proportional book in turn, potentially writing less premium, but maintaining tight control on the business it wrote.

“Overall, SI Re wrote 6% less property business – a decline that was more than offset by the addition of new diversifying business.SI Re further reduced its exposure to natural catastrophe risk by resorting to higher layers and deploying more capacity to long-tail lines,” the reinsurer added..All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.

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