Rated paper & ILS may be favoured over collateralized UNL retro at renewals: Aon

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Retrocessional reinsurance coverage written by rated carriers, as well as other insurance-linked securities (ILS) products such as industry-loss based instruments, may find themselves in favour over collateralized ultimate net loss retro at the upcoming renewals, Aon executives said recently.

Speaking during a media briefing held in place of the Monte Carlo Rendez-vous by the brokers Reinsurance Solutions unit, CEO Andy Marcell and CEO of Aon Securities Paul Schultz implied that there could be a shift in buying behaviour, partly driven by challenges over trapped collateral.

The expectation is that more collateralized retro reinsurance capacity gets trapped at the end of this year, as retro buyers seek to protect themselves against the uncertain levels of pandemic related losses they may face.

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