Reinsurance recoverable expectations more than US$14 billion off the mark

The gap between reinsurance recoverable expectations of cedants and reinsurers is widening, and is now estimated between US$14-$24 billion, according to a study by Conning Research and Consulting Inc. The estimate is based on expectations reported by cedants which are significantly higher than those of reinsurers.
“While there are filing data issues that distort the net gap calculation, we estimate that it was between US$14 billion and US$24 billion in 2003,” says Clint Harris, vice president at Conning. “The increasing recoverable values expose the industry’s increasing dependence on a financially healthy reinsurance sector.”
While recoverables have grown, up 6% in 2003, the gap in expectations has widened to an even greater degree, by 22% last year.
The report notes that differing expectations are not seen in all cases, and there is no particular trend in any specific segment of the market (e.g. broker versus direct reinsurer).