European headquartered re/insurer Zurich took advantage of market conditions to buy a global aggregate reinsurance cover at the April 1st renewal, which the firm’s CFO called “innovative” and said it included alternative capacity from collateralized markets.During an analyst call today, Zurich’s Group CFO Claudia Cordioli also disclosed that the firm bought an additional $100 million of top-layer cover at 1/1 as well.The new global aggregate reinsurance attaches at $850 million in losses and covers all territories for Zurich, designed to moderate its losses over the course of the risk period for more frequent and smaller catastrophe loss events, so working alongside its main occurrence excess-of-loss tower that would kick-in for very large catastrophes.Cordioli explained that the aggregate reinsurance was secured from both traditional and alternative markets, including collateralized capacity, so presumably from insurance-linked securities (ILS) markets or investors.

Zurich used to have an aggregate reinsurance cover in place, , opting instead to focus on adding more top-layer and peak peril protection at the time.Back then the insurer had said that it felt the costs of purchasing the aggregate reinsurance were too high for that layer of coverage, feeling it could retain more of that risk anyway.But now, seemingly reinsurance pricing and the appetite of traditional and collateralized markets has encouraged Zurich to reinstate a global aggregate catastrophe reinsurance treaty in 2025.

Speaking during the analyst call Zurich CFO Cordioli said, “We’ve been buying in January an additional top layer on top of the usual programme for $100 million of capacity.“And then the second thing which we’ve done in April, taking advantage of the good underwriting, obviously, from the Zurich team, but also the favourable price environment, we’ve been buying a global aggregate that will protect us in in lower layers, for intuitively I would say 1-in-4, 1-in-5 type of scenarios.” Going on to say, “I think it’s a testament to the really great underwriting by the Zurich team, and in particular, the progress that has been made in the US with respect to the cat exposure.But it’s also a fact that we’ve been able to negotiate in the current favourable environment also the aggregate cover, which is a very positive step.” She explained that the new aggregate reinsurance covers all geographies, saying, “I think it’s a very good step taking into account the robustness of our underwriting.” Then Cordioli disclosed that collateralized capacity makes up part of the aggregate cover for Zurich, saying, “We were able to place it the way we wanted it, so leveraging both alternative capacity, collateralized capacity and traditional reinsurance.” Adding, “It’s quite an innovative deal and I’m very happy about that.” Asked where the new aggregate reinsurance attaches for the year from April, Cordioli said, “It’s one in four to one in five, and I believe it’s $850 million on a global level.” Cordioli also said during the analyst call, “I think we’re very well equipped with the additional cat aggregate, but also the top layers that we bought.

“So I feel very comfortable where we are in terms of net catastrophe position.”.All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.Our can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.