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Surety Reinsurance

Capacity and risk-sharing for surety and bond portfolios, with disciplined credit assessment.

Specialty

Surety behaves like credit risk, low frequency, correlated to economic cycles. We support cedants with proportional capacity and excess protection under prudent limits.

Power Re approaches this line as a specialist: we assess each risk on its own merits, price it with actuarial rigor, and structure cover that genuinely fits the cedant’s exposure and objectives, never a one-size template.

Structures

How we structure it

The structures we most often deploy for this line, proportional and non-proportional, tailored to your book.

Quota Share

Proportional capacity with aligned underwriting.

Excess of Loss

Protection against large or correlated defaults.

Credit discipline

Rigorous obligor and cycle assessment.

Risk

Key risks & considerations

What we focus on when we underwrite this line.

Credit-cycle correlation, low frequency, high severity.
Obligor concentration.
Legal enforceability of recoveries.

Our appetite

Surety and bond books with disciplined credit underwriting and diversification.

Technical note

Proportional capacity plus excess protection under prudent per-obligor and cycle limits, it behaves like managed credit risk.

Models

Actuarial modeling

The frequency and severity models we use to price this line, and the loss it aggregates to.

Frequency models

PoissonNegative binomial (clustering)

Severity models

Pareto / Generalized ParetoMixed / parametric (index)

Extreme-value tail (GPD)

$$\Pr(X>x)\approx \Big(1+\xi\,\tfrac{x-u}{\beta}\Big)^{-1/\xi}$$

Above a high threshold u, the tail follows a Generalized Pareto Distribution; systemic accumulation is modeled with clustering and, for agriculture, parametric indices.

Severity models

Severity model	Typical use
Lognormal	Body of the loss distribution, attritional claims
Gamma	Moderate, positively skewed claims
Pareto	Large claims and heavy tails
Generalized Pareto (EVT)	Extreme tail above a high threshold

Discipline

Our underwriting approach

The discipline is the same across every line we write.

Risk selection

We assess each risk on its merits and let marginal business go, growth by quality, not volume.

Pricing discipline

Experience and exposure rating, credibility-weighted, load the price for volatility and cost of capital.

Accumulation control

Clear limits manage concentration by event, geography and cedant across the portfolio.

Claims partnership

Fast, fair and transparent claims handling, the moment our promise is tested.

Why Power Re

Why cede Surety Reinsurance to Power Re

✓
Specialist expertise
Deep technical knowledge of the line and of the Latin American market.
✓
Fast, clear decisions
A timely yes or no, with terms and capacity you can rely on.
✓
Financial strength
13× regulatory solvency coverage and a disciplined retrocession program.
✓
Long-term partnership
We co-design programs and stand with cedants through the cycle.

Let’s build resilient portfolios together

Partner with a reinsurer that combines technical discipline, financial strength and deep regional insight.

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