Reinsurers take on role providing Solvency II capital relief

Firms such as RGA are covering surrender risk, offering to replicate matching adjustment

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Reinsurers are helping insurers get round cashflow mismatches in Solvency II

Reinsurers are playing a growing role helping insurers cut capital requirements under Solvency II, particularly when it comes to using the directive’s complex matching adjustment (MA) rules, which reduce capital for portfolios of assets and liabilities that have matching cashflows.

As insurers seek to squeeze maximum benefit from the adjustment, reinsurers are carving out a new business in which they cover cashflow mismatches, thus extending the benefits of the MA.

“Insurers have spent [the

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