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Tremor Releases Boost!™ to Close the Gap on Short Placements

May 4, 2023

The last mile is often the hardest when placing reinsurance. Inevitably, some risk is popular while other risk is not – for the risk that is unpopular, you need to call on select markets to close the gap. The thing is, whom do you call? Call on one and ask for a big favor? Take the time to call 5 or 10 and hope for the best? With the traditional FOT process, it’s a guessing game, and the markets who do help you will accept an allocation that is substantially different from what they originally wanted.

With Tremor Boost!™, there’s no more guesswork – for risk that is unpopular, simply drag the slider to the right and your select markets all pitch in to help you fill your coverage. Stop when you fill your layer or exhaust the support your partners are able to provide. It is easier for you – no need to go back to the market and haggle. It is also better for reinsurers because they get allocations closer to what they originally wanted – unpopular risk is distributed broadly among markets who are best-positioned to take it on. You get the coverage you need and make your markets happy.

How does it work? Every placement is a give-and-take. When you dial up support to fill out a short layer, Tremor places a participation contingency on your select markets. The markets who are participating the least (proportionally) will shift their allocation to the short layer. Panorama updates in real-time as you move the support slider so that you can precisely dial-in the amount of support you need to finish the last mile of your placement.

In the example below, we are looking at the first layer of a program. Before engaging Tremor Boost!™, the total quantity would lie where the blue and white lines intersect (roughly $40M of coverage), leaving the $50M layer short. To cover the shortfall, the cedent dialed up support, stopping when the layer filled at a 2.5% participation rate – this means that each of the cedent’s select reinsurers must have an allocation on layer 1 and that the allocation can be no less than 2.5% of the reinsurer’s overall allocation. This requirement impacted 3 of 12 select markets – three had participation rates below 2.5%, while the other 9 were already contributing their share to the layer. (The histogram indicates where market capacity is found, e.g. a large portion of select market capacity already has a participation rate near 10%.)

With Tremor Boost!™, cedents can optimally dial up support by simply dragging the slider.

Insurers, reinsurers and brokers interested in learning more about Tremor’s technology and how we can help are invited to reach out directly to the company by contacting Suzan Jo at sjo@tremor.co.