Casualty Treaty Reinsurance

Casualty insurance primarily covers liability and losses resulting from accidents, injuries, or damage to other people or property. Unlike property insurance, which covers losses to the insured’s own property, casualty insurance focuses on the insured’s legal liability for harm caused to third parties. It includes various types of coverage such as: General Liability, Professional Indemnity, Errors and Omissions, Directors and Officers, and Auto.

Reinsurance is a financial arrangement where an insurance company (the ‘ceding company’ or ‘primary insurer’) transfers part of its risk portfolio to another insurance company (the ‘reinsurer’). This helps the primary insurer manage risk, stabilise finances, and increase capacity to underwrite more policies.

Casualty re/insurance is ‘long tail’ because claims often take a long time to be discovered, reported and settled due to their complexity, involving extensive investigation and legal proceedings. This requires insurers to maintain long-term reserves and manage uncertainties arising from evolving legal, economic, and social factors, necessitating careful risk management and pricing strategies.

Facultative reinsurance is individually tailored and assessed for specific high-risk exposures. It provides flexibility but can be more labour-intensive. Treaty reinsurance, on the other hand, automatically covers a portfolio of risks within agreed criteria.

This includes multiple casualty classes and is particularly efficient for high-volume, homogenous risks. Treaty reinsurance simplifies administration, stabilises an insurer’s book of business, and provides reinsurers with a diversified spread of exposure. For clients, it ensures consistent protection, capital efficiency, and long-term stability.

At Canopius, we combine global reach with local expertise so our clients get tailored solutions. Our presence in international reinsurance markets and in-house claims team means we can respond quickly and efficiently. We specialise in multiple casualty classes and solutions for long-term success.

Treaty reinsurance provides long-term protection and financial stability by covering a portfolio of risks. It improves capital efficiency, underwriting capacity and reduces volatility.

For insurers, treaty reinsurance means predictable results, protection against catastrophic events and growth across a broad range of business lines.

Non-proportional basis reinsurance (e.g. excess of loss) provides protection when claims exceed a certain threshold. For casualty classes, this means insurers are protected from large, unexpected losses while retaining smaller, more predictable exposures. This balances risk, protects capital and allows insurers to underwrite more confidently.