2018/19 Pool and GXL Reinsurance contract structure

As previously reported, there have been some structural changes in the Group pooling arrangements for the 2018/19 policy year. A diagram showing the 2018/19 Pool and GXL reinsurance contract structures, and an explanation of the changes, is below:

Reinsurance17

Club retention/Pool attachment

The individual club retention and the attachment point for the pool remain unchanged at US $10 million.

Pool structure

The Lower Pool layer stretches from US $10 million to US $50 million, and the Upper Pool layer from US $50 million to US $100 million.

General Excess of Loss (“GXL”) structure

The attachment point on the Group GXL reinsurance programme remains at US $100 million from 20 February 2018.

  • The first GXL layer (US $100 million-US $600 million) is reinsured 55% under the main GXL placement, 30% by Hydra, and 15% by private placements.

  • The second GXL layer (US $600 million-US $1.1 billion) is reinsured 85% under the main GXL placement, and 15% by private placements.

  • The third GXL layer (US $1.1 billion-US $2.1 billion) is 100% reinsured under the main GXL placement.

Overspill protection

The Collective Overspill reinsurance layer which attaches excess of the GXL limit adds a further US $1 billion of protection (US $2.1 billion-US $3.1 billion)

Hydra pool/GXL reinsurance participation

Hydra reinsures 100% of the Lower Pool layer between US $30 million and US $50 million. Hydra also reinsures 92.5% of the Upper Pool layer (US $50 million – US $100 million). The remaining 7.5% of exposure within this layer remains with the club incurring the claim.

Private placements

The three 5% multi-year private placements cover the first and second layers of the GXL placement (US $1 billion excess of US $100 million).

Oil Pollution

The pool and GXL layer and participation structures for the separate Oil Pollution cover mirrors the main (P&I) placement up to the Oil Pollution cover limit (US $1 billion).

Chartered Entries

For Chartered Entries, there is a single combined P & I and Oil Pollution cover limit of US $350 million. The pool and GXL/Hydra/Private Placement structures under this cover replicate the main placement up to the cover limit.