1 January 2027 Retrocession Renewals: Beyond Pricing, Strengthening Security, Diversifying Capacity and Enhancing Protection
As the 1 January 2027 renewal season approaches, Maksure Risk Solutions believes retrocession buyers have an opportunity to look beyond pricing and use increasingly competitive market conditions to strengthen the overall quality of their programmes.
For reinsurers operating across Africa, emerging markets and international portfolios, renewal strategy should increasingly focus on four priorities: counterparty security, diversification of capacity, breadth and certainty of coverage, and efficient programme structure. Competitive pricing is important. However, the true value of retrocession is ultimately determined by the protection it provides when significant losses occur.
A Strategic Opportunity for Retrocession Buyers
Increasing competition for reinsurance business provides retrocession buyers with an opportunity to reassess not only the cost of protection, but also the quality and resilience of their programmes.
Historically, renewal discussions have often centred on premium reductions and securing sufficient capacity. While both remain important, a successful renewal should also consider the financial strength of participating counterparties, concentration of capacity, alignment between inward liabilities and outward protection, contractual certainty, and the programme's ability to withstand major loss events.
For brokers, this environment presents an opportunity to translate market competition into sustainable improvements in programme design.
At Maksure Risk Solutions, our approach to the 2027 renewal season is therefore centred on helping clients strengthen their balance-sheet protection through better-quality security, broader market access, stronger contractual terms and more efficient programme structures.
The strongest programme is not necessarily the cheapest. It is the one that provides reliable and predictable protection when it matters most.
1. Strengthening Retrocession Security Panels
The effectiveness of any retrocession programme ultimately depends on the ability of participating counterparties to honour their obligations following major losses.Competitive pricing can lose much of its value if weak counterparty security creates uncertainty around recoverability. The 2027 renewal provides an opportunity for buyers to reassess the financial quality and concentration of their existing panels.
Maksure's approach focuses on:
- Increasing participation from appropriately rated international reinsurers.
- Replacing or supplementing marginal capacity with stronger counterparties where commercially appropriate.
- Reviewing claims-paying ability, capital strength and financial stability.
- Reducing excessive dependence on individual retrocessionaires.
- Assessing collateral and other credit-risk mitigation arrangements where appropriate.
- Ensuring placements are consistent with applicable regulatory requirements and internal counterparty-security policies.
The objective is straightforward: use greater market competition to secure better-quality capacity, not simply cheaper capacity.
A stronger security panel can improve confidence in recoverability while reducing counterparty concentration and credit exposure.
2. Geographic Diversification: Managing Concentration Risk
Geographic diversification is becoming increasingly important in retrocession strategy and managing concentration risk is a key
A reinsurer may maintain a diversified underlying underwriting portfolio while its retrocession protection remains disproportionately dependent on capacity from a particular market or region. This can create concentrations across counterparty, regulatory, economic and catastrophe exposures.
Maksure therefore advocates a broader approach to international market engagement, where appropriate, including:
Europe and London
Engaging established international reinsurers, Lloyd's market participants and specialist underwriting capacity.
Asia
Developing relationships with established Asian reinsurance markets capable of providing complementary capacity.
Latin America
Exploring suitable regional markets that can complement traditional placements, subject to appropriate financial-security, regulatory and underwriting requirements.
Importantly, diversification should not be measured simply by the number of countries represented on a placement. True diversification requires an assessment of financial strength, ownership, concentration, correlation of exposures and claims-paying capability across the entire security panel. The objective is to create a balanced programme that reduces excessive dependence on any single counterparty, capital source or geographic market.
3. Improving Terms and Coverage Certainty
Financial security is only one component of effective retrocession. The contractual terms governing recoveries are equally important. During more constrained market cycles, buyers may have accepted narrower coverage definitions, restrictive exclusions, demanding claims provisions or other limitations as part of securing capacity.
A more competitive renewal environment creates an opportunity to revisit these provisions.
For the 2027 renewal, Maksure's focus includes:
- Reviewing restrictive exclusions and negotiating improvements where commercially achievable.
- Reviewing catastrophe event definitions and hours clauses.
- Optimising reinstatement provisions and associated pricing.
- Examining aggregation provisions against the underlying portfolio.
- Strengthening claims-settlement provisions where appropriate.
- Identifying potential gaps between inward reinsurance liabilities and outward retrocession recoveries.
- Addressing emerging and evolving exposures more clearly.
- Reducing contractual ambiguity and improving certainty of recovery.
A central consideration is contract certainty between the underlying liabilities assumed by the reinsurer and the protection provided by its retrocession programme. Any material mismatch can create unexpected, retained exposures. A lower-priced programme can therefore become significantly more expensive if restrictive wording prevents or delays recovery following a major loss. The objective should be broader than achieving favourable pricing: secure protection that responds as intended.
4. Optimising Structure and Capital Efficiency
Renewal also provides an opportunity to reconsider whether historical programme structures remain appropriate. Changes in underwriting strategy, portfolio composition, catastrophe exposure, inflation, capital availability and risk appetite may alter the optimal level and type of retrocession protection.
Our technical broking and actuarial approach considers areas including:
- Excess-of-loss attachment points and limits.
- Occurrence and aggregate protection.
- Proportional versus non-proportional structures.
- Reinstatement requirements and costs.
- Probable maximum losses and catastrophe accumulations.
- Net retained exposures and earnings volatility.
- The efficiency of retrocession purchasing relative to available capital.
Programme optimisation should seek an appropriate balance between retained risk, protection cost, earnings stability and capital efficiency. For growing reinsurers in particular, an appropriately structured retrocession programme can also support underwriting capacity and enable participation in larger or more complex risks within the institution's risk appetite.
Rather than automatically renewing expiring structures, buyers should ask a more fundamental question which is: Does the programme still reflect the portfolio, capital position, risk appetite and strategic ambitions of the business?
5. Expanding Access to International Capacity
As an African-founded Lloyd's-accredited broker, Maksure Risk Solutions seeks to connect insurance and reinsurance portfolios from Africa and other emerging markets with appropriate international capacity. Our international market strategy includes established London relationships alongside the development of suitable capacity across Europe, Asia and Latin America. This approach is intended to offer clients a broader range of potential counterparties while supporting greater diversification and competitive tension.
Our capabilities include:
Security panel optimisation
Assessing counterparty strength, diversification and concentration across participating markets.
Technical retrocession structuring
Designing programmes aligned with exposures, loss experience, risk appetite and capital requirements.
Actuarial analysis
Evaluating catastrophe exposures, attachment points, limits, recoveries and programme efficiency.
Policy wording negotiation
Seeking stronger coverage certainty and addressing contractual restrictions and potential gaps.
International market engagement
Presenting well-structured programmes to suitable global counterparties and supporting competitive negotiations.
The objective is not simply to source capacity, but to improve the quality, resilience and effectiveness of the overall retrocession programme.
6. Supporting the Growth of African and Emerging-Market Reinsurers
African and other emerging insurance markets continue to present significant opportunities for international insurers, reinsurers, brokers and capital providers.
For reinsurers seeking to expand their underwriting portfolios, sound retrocession strategy can play an important role in controlling accumulation, protecting capital and supporting sustainable growth.
We believe the 2027 renewal discussion should therefore be built around four fundamentals:
- Stronger security
Improve the financial strength and reliability of participating retrocessionaires. - Greater diversification
Broaden capacity across suitable international markets and reduce counterparty concentration. - Broader and clearer protection
Improve wording, contractual certainty and alignment with underlying exposures. - Optimised programme structures
Align protection with underwriting exposures, capital requirements, risk appetite and growth objectives.
These are structural improvements whose value can extend well beyond a single renewal cycle and make beyond a simple renewal exercise.
Looking Ahead: Making the 2027 Renewals Count
The 1 January 2027 renewal should be viewed as more than an opportunity to reduce the cost of retrocession. For buyers, the more strategic opportunity is to use competitive market conditions to strengthen counterparties, diversify capacity, improve contractual protection and optimise programme architecture.
Our message to the international reinsurance market is equally clear: emerging-market retrocession should not be considered solely as a source of premium growth. Well-structured portfolios, supported by appropriate data, robust programme design and disciplined risk selection, can provide opportunities to build sustainable long-term partnerships between regional reinsurers and international capital providers.
The objective should therefore be: Do not simply use a competitive market to buy cheaper retrocession. Use it to buy better retrocession. Ultimately, the value of retrocession is tested when significant losses occur.
The strongest programmes combine reliable security, diversified capacity, robust contractual protection, efficient structures and competitive pricing. That is our ultimate goal for the 1 January 2027 renewal: not simply reducing cost but building stronger and more resilient retrocession programmes capable of supporting sustainable underwriting growth.
Phumulani Mazvabo is an Account Executive under Treaties at Maksure Risk Solutions, specialising in treaty reinsurance and supporting the development of tailored reinsurance solutions for clients. His professional expertise encompasses insurance and reinsurance, risk management, and client relationship management, with a focus on structuring effective risk transfer solutions and building strong business relationships. He holds a Bachelor of Commerce degree in Risk Management and Insurance from the National University of Science and Technology (NUST), complementing his practical industry experience and commitment to delivering value-driven reinsurance solutions.
Maksure Risk Solutions is an Afro-Global independent specialist insurance and reinsurance broker with business footprint in Africa, Asia, East & Western Europe, South America and the Caribbean. We provide innovative and tailor-made risk solutions in Insurance and Reinsurance as well as Risk Financing and Actuarial Consulting geared towards capital management and strengthening our client’s balance sheet. Maksure is also one of the major players in Captive Management (Establishment & Management) in South Africa, Mauritius, Bermuda and various other jurisdictions. We have access into the Lloyds of London with a deep understanding of African markets. Our global nature ensures that our clients access quality capacity as well as some of the world’s latest thinking and solutions.Maksure Risk Solutions is an Afro-Global independent specialist insurance and reinsurance broker with business footprint in Africa, Asia, East & Western Europe, South America and the Caribbean. We provide innovative and tailor-made risk solutions in Insurance and Reinsurance as well as Risk Financing and Actuarial Consulting geared towards capital management and strengthening our client’s balance sheet. Maksure is also one of the major players in Captive Management (Establishment & Management) in South Africa, Mauritius, Bermuda and various other jurisdictions. We have access into the Lloyds of London with a deep understanding of African markets. Our global nature ensures that our clients access quality capacity as well as some of the world’s latest thinking and solutions.
