We provide services for your business designed to ensure maximum value creation. Here’s an outline of the solutions we offer to meet these objectives:
Enhanced-equity returns
Maximise the value of your business
Catalina Re’s solutions improve Return on Equity (“ROE”) through releasing capital relating to prior underwriting year claim reserves or “back books”. Solutions also remove volatility on claim reserves and allow clients to focus on core business lines, regions, or legal entities. Working with Catalina Re will provide for a more sustainable profitable business with improved ROE.
Volatility-risk reduced
Managing your liabilities to reduce uncertainty
Back book liabilities are exposed to significant uncertainty, including through inflation, litigation, changes in legislation and continued operational costs. Unexpected increases in back book liabilities can create volatility of results and impact business confidence and valuations for investors. Selling or reinsuring back book years provides certainty and produces more sustainable stable results.
Core-optimised focus
Helping you target and grow your core activities
Time and resources spent managing legacy portfolios and/or legacy entities can be a major distraction from the core business model. This can result in disproportionate time wasted and the need to explain why a legacy business result has impacted business performance, undermining results of core activities. Selling or reinsuring these liabilities allows the business to focus on what really matters.
Profit-margin retained
Optimise your performance potential
Most carriers make most of their profits in years one to three and therefore retain that underwriting margin when passing any potential future volatility to Catalina Re through a retrospective solution. These transactions on back books typically cover underwriting years from year three to the oldest underwriting years, providing significant capital and volatility benefits.
Value-enhanced M&A
Taking the risk out of M&A
When a client is evaluating an acquisition or disposal of a Property & Casualty business, the value can be enhanced, or pricing improved when combined with a retrospective reinsurance back book transaction for the target’s liabilities. This reduces the capital required to finance the transaction and removed the volatility of back book reserves post-acquisition.
Cost-reduction opportunities
Removing costs to improve performance
Often a hidden benefit of a retrospective back book transaction is the expense-removal opportunity. Carriers frequently retain people and technology associated with previous distribution methods, business lines or older back book years. Selling or reinsuring portfolios improves capital efficiency, removes volatility but also removes the expense associated with these books and lowers the expense ratio, improving profitability.
Capital- efficient solutions
Unlock capital tied up in back books
Longer-tail claim liabilities require more capital. Completing a back-book transaction with Catalina Re, releases capital allocated to these reserves. Excess capital can be returned to shareholders or used to support underwriting growth.