Sidecars help fuel renewal growth for reinsurers in EMEA, says Gallagher Re
According to Gallagher Re, reinsurers within the EMEA regions looked to obtain growth across Europe at the key 1/1 renewals, with many offering more capacity as they aimed to achieve their growth mandates which came almost exclusively from incumbent reinsurers, in part empowered with ILS-fueled new sidecar capacity.
According to the reinsurance broker, this allowed the increased property catastrophe limits of approximately EUR 2 billion purchased for Europe and an additional EUR 3 billion in Turkey to be easily absorbed, “as reinsurer appetite for more remote top layers was significant.”
Following the difficult renewals of 2023 and 2024, where European buyers had to absorb major changes in their reinsurance protections both in terms of price and retention, with limited room for negotiation with reinsurers, all of them reportedly approached this year’s January renewal season “with a determination to achieve better value.”
“Reinsurers’ strong results for the 2023 and 2024 underwriting years, allied with more moderate catastrophe losses in Europe impacting reinsurers in 2024, added to buyers’ confidence to push for improvements,” Gallagher Re said.
Expanding on from EMEA and focusing on the entire insurance-linked securities (ILS) market, the broker states that demand for collateralized reinsurance is returning.
Gallagher Re explained that it has witnessed increasing efforts to expand solutions outside of catastrophe bonds and property-related collateralized reinsurance, such as the development of casualty sidecars and parametric sidecars.
“The use of parametric triggers has doubled from three cat bonds in 2023 to six by year-end 2024. We also saw parametric sidecars and collateralized reinsurance transactions using parametric triggers,” the broker said.
Sidecar activity was also a focal point on the non-marine retrocession side at 1/1, as reinsurer growth ambitions combined with strong returns seen from 2024, which as Gallagher Re states “drove increased appetite from incumbent players, and encouraged inflows of capital to both ILS and traditional rated carriers through quota share and sidecars.”
There’s already been strong reinsurance sidecar activity across the ILS market so far this year from numerous companies, including France headquartered international reinsurer, CCR Re who recently launched its seventh sidecar in the 157 Re series of deals, which for 2025 sees the addition of a new feature to enable more efficient reuse of collateral between sidecar vintages.
In addition, global reinsurance giant Munich Re recently secured its Eden Re II Ltd. collateralized reinsurance sidecar at $150 million again for 2025.
While MS Amlin renewed its Phoenix Re sidecar at its largest size yet.
As a reminder, you can view details of many reinsurance sidecar transactions in our directory.
