Compre agrees £200m adverse development cover deal with Lloyd’s syndicate

Speciality reinsurance group Compre Group Holdings has agreed a retrospective structured adverse development cover (ADC) transaction with a Lloyd’s syndicate.

In ADC agreements, insurers purchase a specialised type of reinsurance that provides coverage for future loss payments should their portfolio payouts exceed a specified amount.

Compre said that the transaction covered the syndicate’s 2023 and prior years of account on a whole basis, including its multiline property and casualty business and assumed reinsurance, with reserves of £200m.

It added that a bespoke agreement had been designed to “provide the syndicate with greater certainty around adverse development while supporting effective balance sheet management and capital optimisation”.

The deal includes a variable premium structure, as well as the retention of assets and investment income by the syndicate, which Compre said allowed the deal to be “aligned with the client’s evolving capital and balance sheet requirements”.

The Lloyd’s syndicate will also retain responsibility for the ongoing management and administration of underlying claims.

The deal includes the option to renew terms, with an initial review scheduled for Q1 2027 and yearly reviews planned thereafter.

Retrospective proposition

Rachel Bardon, chief underwriting officer at Compre, said: “This transaction is a strong example of how we are continuing to evolve our retrospective proposition to meet clients’ changing capital and balance sheet needs.

“By combining our expertise in structured reinsurance with a renewable approach, we can provide a solution that addresses earnings volatility and supports capital optimisation while allowing the client to retain its assets and claims administration.

“The recurring nature of the structure also reflects the value of building longer-term partnerships with clients, rather than viewing retrospective reinsurance as a one-off transaction.”