We are pleased to share Guy Carpenter’s latest report, Structured Reinsurance: Impact on Health Product Pricing, which delves into the creative potential of structured reinsurance in the pricing of health insurance.
Structured reinsurance offers a unique approach that not only mitigates risk but may also lower the cost of capital. Our paper outlines the key benefits of this strategy, including:
- Capital Efficiency: Structured reinsurance extends the premium to capital ratio, enabling you to write more business with the same amount of capital.
- Lower Cost of Capital: The cost of structured reinsurance may be lower than the cost of the ceding company’s capital.
- Return on Equity: This approach can enhance the ceding company’s return on equity.
- Pricing: A lower pricing load may be achieved by unlocking the embedded value of a ceding company’s business through lowering the cost of capital.
Structured Reinsurance: Impact on Health Product Pricing
Structured reinsurance not only mitigates risk, it may also reduce the cost of capital for health insurance.