Layering

Layering means slicing the cover sought into stacked, contiguous layers running from the cedant's retention to the top of the program. Each layer has its own attachment, limit, price and panel of reinsurers, and behaves as a separate contract. The problem it solves is twofold. On price, reinsurers do not share the same appetite by height: some are competitive on low layers, hit often and with enough experience to price, others write only high layers, where rate on line is low and diversification strong. Slicing serves each where it is cheapest. On capacity, no single reinsurer would take two hundred million from a mid-sized cedant: layering splits the exposure, and co-reinsurance splits it again inside each layer. The hazard peculiar to layering is a coverage gap, a discontinuity between the top of one layer and the attachment of the next, which a program review must rule out.

A health and property cedant presents a 2026 program of six layers running from 5 to 300 million, placed with twenty-three reinsurers. The two lowest layers carry rate on line of 24 and 11 percent and are written by seven markets; the two highest, at 1.8 and 0.9 percent, draw nineteen markets, six of which appear on no other line of the program. The tower costs 12.7 million in total for 295 million of aggregate limit.

Layering, Structuration en tranches, Tour de réassurance, Programme en tranches