Value of Security in Reinsurance

By: Alexander Pui

Reinsurance is a curious industry, Where balance sheets are borrowed for money, A price to insulate from financial harm, Or even help survive the odd black swan. Whether you cede, transfer or diversify, Risks will remain no matter how hard you try, How certain are you that they will pay? Come that tragic, ill-fated day. “How deep are their pockets?” – you wonder, Perhaps the raters may have the answer, Beware, as firms that once attracted A+, Have also been hit by the proverbial bus. Are those shareholders banging at the door? “A measely 10% return? We want more!!”, Alas how do you go forth and underwrite, Without whetting your bulging risk appetite? A reinsurer you trust may just be the key, To safeguard your long term security, As catastrophes lurk just around the bend, Be it through acts of god, or acts of men.