Structured Reinsurance: Impact on Health Product Pricing
Structured reinsurance not only mitigates risk, it may also reduce the cost of capital for health insurance.
We are pleased to share Guy Carpenter’s latest report, Structured Reinsurance: Impact on Health Product Pricing, which delves into the creative potential of structured reinsurance in the pricing of health insurance.
Structured reinsurance offers a unique approach that not only mitigates risk but may also lower the cost of capital. Our paper outlines the key benefits of this strategy, including:
- Capital Efficiency: Structured reinsurance extends the premium to capital ratio, enabling you to write more business with the same amount of capital.
- Lower Cost of Capital: The cost of structured reinsurance may be lower than the cost of the ceding company’s capital.
- Return on Equity: This approach can enhance the ceding company’s return on equity.
- Pricing: A lower pricing load may be achieved by unlocking the embedded value of a ceding company’s business through lowering the cost of capital.
