Swiss Re bows out of retrocession business

The property retrocession business Swiss Reinsurance Co acquired when it purchased GE Insurance Solutions, will not be renewed.
The reason the reinsurer is not renewing the business is related to the dissolution of the retrocession market. The decision of Swiss Re reiterates the fact that it will be very hard for primary insurance companies to get significant reductions in price from reinsurers at renewal.
The amount of premium volume that Swiss Re will lose as a result of its removal fromthe property retro business is unknown.
Chief executive of Swiss Re Jacques Aigrain says an analysis of the GEIS book of business since it was acquired shows the reinsurer will lose less business than originally expected due to duplication of accounts.
Aigrain recently stated that as of the July 1 renewal, Swiss Re has retained an average of 91% of the business. He continued to explain that signals indicate that attrition may be lower than the 30% quoted in November 2005 as a result of being adjusted for lines the Company does not want to take on.
Swiss Re anticipates its reinsurance pricing levels will remain firm at renewals, and continues to forecast that property rates, including U.S. natural catastrophe business, will rise while non-U.S. rates will be flat. The reinsurer goes on to state that it anticipates asualty rates, except for auto, will slightly decline while motor casualty rates will be flat. However, Swiss Re says specialty casualty lines such as D&O will be flat while marine offshore rates will rise.