U.S. premium ceded to alien reinsurers rose 17 percent in 2005, according to a study released today.

The Washington D.C.-based Reinsurance Association of America reported total U.S. premium ceded to alien reinsurers was $62.1 billion last year, representing a 17 percent increase from 2004.

Ceded recoverables from alien reinsurers came in at $123.9 billion for a 16 percent rise from 2004. Total premiums ceded to affiliated alien reinsurers increased by 29 percent to $68.5 billion last year.

Alien companies' share of U.S. unaffiliated reinsurance premium rose to 52 percent last year. The largest markets for unaffiliated premiums ceded and recoverables due in 2005 were Bermuda, the United Kingdom and Ireland, Germany, the Cayman Islands, Switzerland and Barbados.

This year's report comes as the National Association of Insurance Commissioners appears poised to ease the requirements for alien reinsurers doing U.S. business to post 100 percent collateral with a yet-to-be defined ratings system that would apply to all reinsurers, regardless of country of domicile.

The RAA reports that alien and alien-controlled U.S. companies currently account for 85 percent of the U.S. insurance market.

The organization has been outspoken in recent years that collateral requirements should be maintained to protect the solvency of domestic ceding companies.

"This data suggests that the current U.S. regulatory environment and the 100 percent collateral requirements for unauthorized reinsurers is not a significant barrier for alien companies as they account for more than half of the U.S. unaffiliated reinsurance market," said Joseph Sieverling, RAA senior vice president.

Special Reports /

Premium To Foreign Reinsurers Rose In '05

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