Retroactive reinsurance benefits

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Retroactive Reinsurance - Munich Re

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Retroactive Reinsurance

The potential benefits of a retroactive reinsurance solution for your company are as individual as your position, situation and goals. Typical positive effects include reduced reserve risk, increased own funds, protection against adverse developments, reduced asset/market/investment risk, reduced asset-liability mismatch risk, and reduced timing risk or virtual finality by setting a reasonable limit.

Here are some specific client needs and targeted responses:

Need: Capital relief / Capital efficiency

Response: Retroactive reinsurance that helps to significantly improve key figures for various capital requirements under RBC, S&P, AM Best, Solvency I, Solvency II or other regional solvency regimes. Whether you are seeking to explore capital relief or other ways of boosting your capital efficiency, a specially structured retroactive cover may address your needs better than other financing or prospective reinsurance models.

Need: M&A Protection / Optimisation

Response: Retroactive reinsurance to take over the risk of materialisation of significant adverse developments in the portfolio and cover undesired lines of business. From freeing up capital for acquisitions to ring-fencing run-off liabilities and enhancing the predictability of your balance sheet stability in cases of sale, retroactive reinsurance can be instrumental in your M&A activities.

Need: Balance sheet certainity

Response: Retroactive reinsurance that reduces reserve volatility and hence has a stabilising effect on the total balance sheet, including the profit and loss account. Our solutions improve predictability for potential investors.

Need: Strategic repositioning / Exit solutions

Response: Retroactive reinsurance to take over existing run-off liabilities, setting free resources and capital to be used for strategic purposes. It enables you to concentrate on your core business and growth initiatives. By freeing up capital, our solutions give you manoeuvrability to invest in new business, acquisitions, share buy-backs and other initiatives.

Need: Back-up and improvement of historic reinsurance

Response: Retroactive reinsurance that can replace commuted long-tail treaties, offering flexibility in reinsurance programme placement and in securing your net liabilities.

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This publication is available exclusively to Munich Re clients. Please contact your Client Manager.