A report from WTW has found that insurers increasingly rely on facultative reinsurance for strategic risk management, but capacity remains an issue.
Facultative reinsurance is becoming an essential part of insurers’ risk management strategies, according to WTW’s Facultative Reinsurance Report 2024. However, accessing sufficient capacity remains a significant challenge, as supply continues to fluctuate in response to market cycles.
Facultative reinsurance is coverage negotiated on a case-by-case basis. It allows insurers to transfer specific, individual risks to a reinsurer, often for complex or high-value exposures outside treaty agreements.
The survey, conducted with 300 senior decision-makers at leading property and casualty (P&C) insurers across Europe, North America, Asia Pacific, and Latin America, reveals a shift in how insurers view facultative reinsurance. Instead of seeing it as a one-off transactional tool, insurers are now using it strategically to manage risks, fill coverage gaps, and address market volatility.
Key findings
The report reveals that 86% of insurers see facultative reinsurance as critical for managing risk, cap