In this Insurance Asia News article from the Singapore International Reinsurance Conference (SIRC), Justin Ward, Head of Capital Advisory, Asia Pacific, discussed how advancements in risk-based capital frameworks in the region is leading to increased levels of discussion around the sources and uses of capital, including reinsurance, from both tactical and strategic perspectives.
As insurers improve their understanding of the risks they are carrying and capital productivity, “we are seeing discussions ranging from structured reinsurance, alternative sources of reinsurance capital right through to alternative value chain combinations,” Justin said.
“Across various jurisdictions, we have observed several distinct solutions emerging, including retrospective reinsurance, which acts like a ‘pseudo’ equity injection by releasing the capital associated with claims liabilities from the balance sheet,” he continued.