European cedants continue to take advantage of the current soft market environment by purchasing cheap reinsurance cover.  At the same time, the decline in retention ratios seems to slow down, according to the recent A.M. Best Briefing European Cedants Continue to Increase Reinsurance Buying but Demand for Cover Slows.

A combination of several factors is contributing to an increase in cession levels, which include new regulatory and capital requirements under the Solvency II regime as well as cedants aiming for commercial growth by diversifying portfolios and underwriting new lines of business.