Reinsuring a risk or treaty is never contemplated in isolation. Every decision to transfer risk is made considering the overall portfolios of both the insurer ceding the risk and the reinsurer taking it on. Most reinsurers prefer to take on a diverse slice of a cedent’s risk, and most cedents need reinsurance across their entire portfolio. Since our goal at Tremor is to improve the allocation of risk – not just the syndication of individual treaties but the allocation across programs as well – we are excited to announce two additions to the Tremor platform: Multiplace determines prices and allocations for multiple programs simultaneously while automatically managing cross-treaty concerns.

Consider this true story of a ceded re buyer who stepped into a new role for a time: [A ceded re buyer] spent X years in the role, meeting reinsurers in all the usual venues and negotiating reinsurance contracts. He shifted to [another role] for about 10 years, and then returned to the buyer’s chair. When he returned, he came back to a contract that had barely changed from the ones he negotiated a decade prior.

Supply curves are fascinating – they capture reinsurers’ unique strategies and risk appetites in a way that only Tremor’s modern market tech and confidentiality rules can. How do reinsurers use them in practice? In this post, we analyze real supply curves and find a wide variety of curves and a wide variety of appetites, with one particularly interesting finding: based on our estimation, the reinsurers who put more effort into their curves are more likely to get the allocations that they want.

The current renewal season has been one of the most challenging in decades. With many cedents struggling to find the capacity they need and many reinsurers waiting to see what the rest of the market does, it is easy to feel like the market has stalled. It doesn’t need to be this way – with a modern market design and proper incentives, placements go from contract to coverage in a fraction of the time.

As a reinsurer, Tremor’s powerful authorization tools uniquely allow you to control your allocation while having a strong voice in the placement process. We recently discussed how to use supply curves to control your allocation and how Tremor gives you a stronger voice in the placement process – in this post, we will focus on excess of loss (XoL) towers and highlight a few of the the higher-level strategies that Tremor’s authorization tools make possible, including:

Reinsurers are price takers in the firm order terms (FOT) process. The cedent sets pricing and then solicits authorizations from reinsurers – while coverage terms may be negotiated, prices are held firm. Even when reinsurers are invited to quote before terms are set, final pricing is driven largely by broker models and advice. Pure price-taking is a compromise in any market. It simplifies the process but limits the breadth of ways that buyers and sellers can come to terms.

Have you ever wanted to explore Tremor or see what the experience is like for the other side of a transaction? We’re excited to announce self-driven demos that let you go hands-on with Tremor and simulate transactions. Our self-driven demos let you step through a Panorama transaction as either a cedent or a reinsurer. You can use them to practice, to see how specific features work, and even to experience Tremor from the other side of the transaction.

Panorama dramatically speeds up the placement of reinsurance. Consider the following statistics from Tremor’s placements: Reinsurers who participated on Tremor learned their final lines within three business days of submitting their authorizations. Cedents who placed with Tremor finalized coverage in five business days from the time Tremor started collecting authorizations, without having to invest time to set firm order pricing. By comparison, a traditional firm order terms (FOT) process often takes more than a month to resolve the same issues.

Concurrency is central to the “firmness” of a traditional firm order terms (FOT) process, yet it leaves cedents and reinsurers alike thinking they see opportunities left on the table. In reality, these opportunities are a mirage – without concurrency they disappear, leaving in their place an expensive process that struggles to match the performance of concurrent terms. So why do cedents see opportunities, and why do those opportunities disappear? We will see that the answer, witnessed in analogous markets across a wide variety of industries, lies in game theory – for a reinsurer, to be paid far below the rest of the market is leaves money on the table risks undermining their own portfolio; when cedents relax concurrency, reinsurers who would otherwise have been competitive typically protect themselves by offering less-favorable terms than they would be willing to accept as concurrent FOT.