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A reinsurance program is only as good as the creditworthiness of the counterparty with which it is placed. To ensure that clients’ ceded losses are collectible, Holborn continuously monitors the ability and willingness of their reinsurance partners to pay, as well as clients’ aggregate positions with any one reinsurer.
Holborn’s Reinsurance Security Committee, which consists of the senior management of the firm, meets regularly to review the financial condition of each reinsurer. The Committee considers information from a variety of sources, including the reinsurer's financials, third party financial data and rating agencies' analysis, as well as market intelligence and qualitative assessments made by Holborn's own experts. Holborn professionals meet with reinsurers regularly to proactively assess their strategic plans, underwriting controls, changes in staff and risk appetite.
A reinsurer’s ability to pay is only half of the security equation: the willingness to pay, and to pay on time, is of equal concern. To this end, Holborn constantly monitors the claims-paying history of each market participant to identify potential problems and develop strategies to minimize any financial impact. The firm also continuously searches for new and alternative sources of capacity for clients, applying the same rigorous criteria as that used with existing reinsurers. These may include credit enhancement strategies, such as letters of credit or trust funds, when appropriate to a client’s specific needs.
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