The total of offshore reinsurance premiums declined almost 12 percent in 2006, according to a new report from the Reinsurance Association of America.
Total reinsurance premiums ceded to offshore reinsurers came in at $54.7 billion in 2006, a decline of 11.9 percent from the previous year.
Net reinsurance recoverables due from offshore reinsurers declined to $114.2 billion, RAA reported.
The study differentiates between affiliated offshore reinsurers such as Swiss Re, which has a U.S.-domiciled subsidiary, and unaffiliated reinsurers domiciled abroad. Together the two groups comprise 84.5 percent of the ceded premium in this country, down from 85.4 percent in 2005.
Total premiums ceded to affiliated offshore reinsurers decreased by 16.3 percent from the previous year to $32.5 billion, while net recoverables due from affiliated offshore reinsurers increased 2.8 percent to $70.4 billion, RAA said.
Premiums ceded to unaffiliated offshore reinsurers decreased by 4.4 percent to $22.2 billion, while recoverables from unaffiliated offshore reinsurers decreased 21 percent to $43.8 billion, according to the report.
RAA Vice President Joe Sieverling noted the report said that over 4,200 companies from 95 jurisdictions either assumed U.S. premium or had reinsurance payables to U.S. companies.
"The data suggest that the current U.S. regulatory environment and 100 percent collateral requirements for unauthorized reinsurers is not a significant barrier for offshore companies as they account for more than half of the U.S. unaffiliated reinsurance market," he said.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.