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Reinsurer Refresh

October 30, 2020

Tremor brings value to reinsurers, supplying more risk more often

How and why do reinsurers work with Tremor? Our reinsurance partners gain tangible benefits by using Tremor’s innovative risk transfer platform. Tremor works hard to continue delivering value to them.

Tremor presents reinsurers with more risk more dynamically with modern trading features. When a reinsurer is invited to quote on a placement, they logon to Tremor’s platform, review the placement details and decide if they’d like to participate. They can review multiple placements quickly, with the contract, terms and conditions all organized in one place.

Tremor’s technology facilitates portfolio balancing with sophisticated capabilities. Reinsurers quote a series of prices and allocations for each placement. For example, a reinsurer could be willing to sell more protection if the price increased by 25 bp, and even more if the price increased by 50 bp. Tremor uses this data to create a unique supply curve for each reinsurer. If the market clearing price is higher than the reinsurer’s quote, the reinsurer receives the higher price. The reinsurer will never receive a price lower than their quote.

Placement pricing is decided in a matter of days. That’s because all reinsurers submit confidential sealed quotes over the same time period. This eliminates cumbersome back and forth price negotiations. Individual reinsurer quotes are never shared with the cedent. Tremor calculates the optimal placement price and allocation for each reinsurer. Optimal pricing means there are never any sign-downs.

In addition to pricing over $2B in traditional reinsurance placements, Tremor also hosts online Industry Loss Warranty (ILW) auctions which leverage a fully online, programmatic marketplace to price and allocate risk. There are no other reinsurance markets where ILW risk can be traded in real time in this way. The auctions place a range of common ILWs including popular region / peril / trigger combinations. Interested parties submit blind, sealed quotes to buy and/or sell.

Reinsurers benefit from Tremor’s powerful post-auction analytics. Reinsurers have never before had access to this type of data. After each placement, Tremor delivers reporting related to overall demand, supply and pricing for the placement. This data gives a clear picture of current market conditions and can inform future pricing decisions.

Reinsurers have always gained a market advantage through their quantitative rigor. For this reason they appreciate that Tremor’s platform allows them to quote not one price point, but their entire supply curve. That way, they quote exactly the pricing that matches their requirements. Reinsurers also prefer to work with Tremor because it is an independent third party. Tremor is not a buyer, seller or broker. The firm is solely focused on providing the best reinsurance market clearing environment.

Tremor continues to build relationships with critical reinsurance partners. The Tremor marketplace already includes 90+ reinsurers from all major markets. Reach out to Tremor to learn more about our capabilities or to determine if your firm is already registered to use Tremor’s platform.

Below are results from one of Tremor’s ILW Auctions. This data gives a clear picture of market conditions during the auction and can inform future pricing decisions.

ILW Market Price and Volume History

Ready to learn more? Reach out to one of our marketplace experts.