Market participants

The market is large, concentrated, and analytically demanding, and its participants start with cedents, reinsurers, and brokers.

The core participants

Risk moves from a cedent to a reinsurer through a broker, and from the reinsurer on to a retrocessionaire. Alternative capital enters beside the reinsurer (through funds writing collateralised reinsurance, cat bonds, and sidecars), and two participants, model vendors and rating agencies, carry no risk but shape how the risk-carriers price it. The diagram traces those relationships.

Cedents (primary insurers)

The cedent is the insurance company that buys reinsurance. They write policies directly with policyholders (homeowners, businesses, governments) and use reinsurance to manage their exposure to large or correlated losses.

A cedent’s motivation for buying reinsurance:

• Capital efficiency: transferring peak risk frees up capital to write more business
• Earnings stability: smoothing the impact of catastrophe years on financial statements
• Regulatory compliance: demonstrating to regulators that extreme events are covered
• Capacity: accessing the reinsurer’s balance sheet to write larger or riskier policies

Caldera Re

In our running example, SunCoast Insurance, Pacific Mutual, and Baltica Insurance are cedents: US and European insurers purchasing catastrophe protection from Caldera Re. SunCoast cedes hurricane and earthquake risk under three contracts.

Reinsurers

The reinsurer accepts risk from cedents in exchange for premium. Reinsurers price risk they cannot directly observe, manage portfolios across multiple cedents and geographies, and hold sufficient capital to pay claims from extreme events. They rely on the cedent’s exposure data and on catastrophe models for the first of those. Most of the analytics this site describes runs inside a reinsurer.

Caldera Re

Caldera Re is our fictional reinsurer. It writes property catastrophe reinsurance across North America, the Caribbean, Europe, and Japan, with a portfolio of six contracts covering different perils, geographies, and cedents. The portfolio is intentionally small for hand-computation, but the analytical concepts scale directly.

Retrocessionaires

A retrocessionaire is a reinsurer’s reinsurer: it sells retrocession (reinsurance bought by a reinsurer on the portfolio it has assumed, “retro” for short). Retrocession is where a reinsurer is itself the cedent: the same contract forms, the same analytics, one level up the chain, and the party writing it is often another reinsurer, standing on both sides of the market. In the running example, NorthStar Re provides Caldera Re’s retrocession protection, and the Portfolios page shows the portfolio’s loss table serving as a retro contract’s subject loss.

Brokers

Brokers are intermediaries that connect cedents with reinsurers. A reinsurer either writes through intermediaries or deals with cedents itself, and the market names the two channels the broker market and the direct market.¹ The placement mechanics that follow are the broker market’s.

A broker’s role:

• Structuring: advising the cedent on optimal contract structure (attachment, limit, type)
• Placement: marketing the risk to reinsurers and negotiating terms on the cedent’s behalf
• Market intelligence: providing pricing benchmarks and capacity information
• Analytics: running catastrophe models and presenting risk analyses to both sides

The major broking firms sit between the two sides of a brokered placement: Aon, Marsh Re (formerly Guy Carpenter), Gallagher Re, and Howden Re.² They control the flow of information between cedents and reinsurers, and nearly half the buyers in Aon’s 2025 survey license no catastrophe model of their own and rely on their broker for the modelling.³

Meridian Brokers is Caldera Re’s primary broker.

From the Field

The broker’s placement slip, “the slip” in the trade, specifies every term of the contract in business language, not in code. At one reinsurer, two analysts once encoded the same placement slip into the pricing system and produced two different subject-loss definitions; the difference surfaced months later, as a disputed recovery. No tooling caught it, because no tooling we have seen automates that translation reliably at scale. Treat the translation from document to system as a review-worthy engineering step, not data entry.

Model vendors and rating agencies

Two participants carry no risk and shape how every other participant prices it. Model vendors build the catastrophe models whose simulated losses set the market’s view of risk. Moody’s RMS, Verisk, and Cotality (formerly CoreLogic)⁴ are the largest, with specialist vendors such as JBA and KatRisk beside them. A vendor model’s event catalog and loss output are the raw material of the Analytics Toolkit, and a new model version moves the loss numbers of everyone who licenses it. Rating agencies (AM Best, S&P, Fitch) assign financial strength ratings to reinsurers. These ratings directly affect a reinsurer’s ability to attract business, because buyers set a minimum acceptable financial strength (at Lloyd’s every managing agent must) and a reinsurance contract is only as good as the reinsurer’s ability to pay claims.⁵ The capital models the agencies apply are one more consumer of the reinsurer’s modelled loss distributions.

Reinsurers and retrocessionaires are not the only risk-carriers: capital market investors now carry catastrophe risk through funds, bonds, and sidecars.

Alternative capital participants

Hurricane Andrew (1992) and the Northridge earthquake (1994) created the demand, the first cat bonds were issued in 1997, and issuance grew sharply after Hurricane Katrina (2005). Since then, capital market investors have entered the reinsurance market through various structures collectively called alternative capital or insurance-linked securities (ILS).⁶

Alternative capital reached $136 billion at the end of 2025, about 17% of the $785 billion of global reinsurer capital.⁷ That is a share of the industry’s capital base, not of the limit it sells.

ILS funds

ILS funds are asset management firms that invest in insurance risk on behalf of pension funds, sovereign wealth funds, and other institutional investors. They provide reinsurance capacity without being traditional reinsurers. Unlike equity-backed reinsurers, ILS funds typically write fully collateralised (every dollar of limit is posted upfront, which is what lets an unrated vehicle sell limit at all)⁸, and each fund targets the risk profile its investors’ return objectives require.

Caldera Re

Atlas Cat Fund is an ILS fund that participates in Caldera Re’s business both as an alternative capital partner and as the cedent for C6, the Japan earthquake catastrophe excess of loss (CatXoL) contract.

Cat bonds

A cat bond is a financial security issued by a special-purpose vehicle (SPV). The SPV collects premium from the cedent and holds collateral from investors. If a defined catastrophe trigger is met (e.g., hurricane losses exceed a threshold), the cedent receives the payout and investors lose principal to that extent. Where the payout is proportional, principal is written down pro rata between the attachment and the exhaustion point and lost in full only when the exhaustion point is reached. Where the payout is binary, a fixed share of principal (usually all of it) goes to the cedent as soon as the trigger is met.⁹ If no trigger event occurs, investors receive a coupon (premium income) plus their principal back.

Cat bonds matter to analytics because they price catastrophe risk in a publicly observable spread that is re-quoted at every issuance, on the same perils the traditional market covers.¹⁰

Sidecars

A sidecar is a special-purpose vehicle that allows third-party investors to participate directly in a reinsurer’s underwriting results. The sidecar takes a share of the reinsurer’s portfolio (or of a subset of it), sharing both premium income and losses.

Fronting companies

A fronting company is a licensed insurer that issues policies on behalf of an entity that lacks the necessary licence (often an ILS fund or offshore reinsurer). The fronting company retains little or no risk (it passes almost everything through to the actual risk-bearer) but earns a fee for its regulatory licence and administrative services.

Collateralised reinsurance

Collateralised reinsurance is a reinsurance contract written on ordinary treaty terms but backed by collateral rather than by a rated balance sheet. The risk-taker (usually an ILS fund) posts collateral for the full limit less the net premium, as a trust, a letter of credit, or funds withheld, and the cedent draws its recoveries from it.⁸ Of the alternative-capital forms it is the one closest to traditional reinsurance. The contract is a composition of the same financial terms, so its loss-side analytics are identical; only the capital behind it differs. It is also one reason cedents turn to the fronting arrangement: some cedents are permitted to buy reinsurance only from a rated insurer, so a rated fronting company issues the contract while the fund’s collateral stands behind it.

Traditional vs. alternative capital

Dimension	Traditional Reinsurance	Alternative Capital (ILS)
Capital source	Reinsurer’s balance sheet	Capital market investors
Contract term	Typically 12 months11	Cat bonds typically multi-year (three years on average);9 collateralised reinsurance typically 12 months
Relationship	Long-term, renewal-driven	Cat bonds: securities investors can trade, with no standing relationship to the cedent; collateralised reinsurance: bilateral, closer to traditional11
Capital backing	Solvency capital, with diversification across uncorrelated risks reducing the capital needed to carry a given amount of risk	Collateralised: the limit, less the net premium, posted upfront8
Flexibility	Negotiable terms	More standardised triggers
Capacity	Large but finite	Elastic, tied to capital markets
Analytics	Full portfolio context	Often standalone analysis

Key Insight

From an analytics perspective, both traditional and alternative capital require the same core computation: given a contract definition and a table of simulated losses, compute the expected loss, risk metrics, and price. The difference is in the contract structure and the counterparty, not in the analytical computation.

Whichever capital stands behind a contract, premium flows toward the risk-carrier and claim payments flow back.

How money flows

Understanding money flow is critical because it explains what every participant is optimising for.

Capital backing underwritten risk is not set aside in cash: as the diagram’s investment box shows, the assets behind it stay invested and earn returns while they back the risk. What underwriting uses up is the capital’s capacity to absorb losses. Shareholders and investors who commit their money to catastrophe risk require a return for bearing it, measured against what the same money could earn elsewhere. That required return is the cost of capital. The premium has to cover the part of that return the invested assets do not already earn, and that requirement drives reinsurance pricing.

Premium flow (money in)

1. Policyholders pay premiums to their insurer, the cedent, for coverage
2. Cedents pay a portion of that premium to reinsurers for catastrophe protection
3. Reinsurers may pay a portion to retrocessionaires (reinsurers of reinsurers) for their own retro protection
4. Brokers earn a brokerage fee paid by the reinsurer: a negotiated percentage of the ceded premium, conventionally 5%–10% on excess-of-loss treaties and 1%–2.5% on proportional ones¹²

Claims flow (money out)

When a catastrophe occurs, claims flow in the reverse direction:

1. Policyholders file claims with their insurer, the cedent
2. The cedent pays the claim and then files a claim with the reinsurer for the portion covered by the reinsurance contract
3. The reinsurer pays the cedent and may recover from its retrocessionaire

How participants make money

Participant	Revenue	Costs	Profit Driver
Cedent	Policy premiums, investment income	Claims, operating expenses, reinsurance premiums	Risk selection + pricing discipline + investment returns
Reinsurer	Reinsurance premiums, investment income	Claims, retro premiums, operating expenses	Pricing accuracy + portfolio diversification
Broker	Brokerage fees, advisory fees	Salaries, technology, operations	Transaction volume + advisory relationships
ILS Fund	Management fees, performance fees	Administration, modelling costs	Investor returns on catastrophe risk

In Practice

Reinsurers make money in two ways: the underwriting result (premiums collected minus claims paid) and investment income (returns on the assets they hold, both the premium waiting to pay claims and the capital behind it). In “good” years with few catastrophes, both are positive. In catastrophe years, investment income helps offset underwriting losses. Investment income is not the reason reinsurers hold large capital bases: they hold capital to stay solvent and keep their financial strength ratings while they take on risk, and the assets backing that capital earn a second income stream in the meantime.

The premium a reinsurer can charge for the same risk is not constant: it rises and falls with the capital available to the market.

Market dynamics

The market cycle

The reinsurance market follows a well-documented pricing cycle, the market cycle; the insurance-economics literature calls it the underwriting cycle.¹³ It runs from a catastrophe through capital exit, hard pricing, capital inflow and softening, and back:

1. Catastrophe occurs: large losses deplete capital
2. Capital exits: some reinsurers shrink or exit the market
3. Prices rise: reduced supply drives up premiums (a hard market)
4. Capital enters: high returns attract new capital
5. Prices fall: increased competition drives down premiums (a soft market)
6. Return to step 1: the cycle repeats on an irregular period

The market cycle is not the renewal cycle. Most contracts run for twelve months or carry an annual anniversary date, so each comes up for renewal once a year, and the work concentrates in the renewal periods before a few common inception dates: 1 January, the largest (62% of Hannover Re’s traditional property and casualty reinsurance came up for renewal on that date in 2024); 1 April for Japan; 1 June and 1 July for US property catastrophe business, Florida in particular, and for Australia and New Zealand.¹⁴ The renewal cycle has a period of one year; the market cycle has no fixed period.

Each phase asks the analytics a different question:

Phase	Price direction	Capital flow	What the analytics is asked for
After a major catastrophe	Rising	Capital depleted; some reinsurers shrink or exit	Loss estimates against the live portfolio; stress tests against the extreme trials
Hard market	High	New capital enters, drawn by the returns	Capacity allocation: which programs get the limit at the price on offer
Softening	Falling	Capital abundant; competition returns	Marginal impact: which deals add premium without adding tail risk
Soft market	Low	Returns fall; some capital leaves	Portfolio steering and risk selection, with the next hardening in view

This cycle directly affects how analytics are used. In a hard market, risk appetite is conservative and models are stress-tested against extreme scenarios. In a soft market, there is pressure to find marginal opportunities: contracts that add premium income without significantly increasing tail risk. The ability to quickly assess the marginal impact of a new contract on the portfolio becomes a competitive advantage.

Power dynamics

The market is not symmetric. Information, relationships, and capital create leverage:

• Brokers see both sides of the market. They hold every quote, set the firm order terms each reinsurer then takes a share of or declines, and a reinsurer quoting away from its peers moves that price very little¹⁵
• Rating agencies move capacity. When AM Best and S&P changed their catastrophe capital charges after the 2005 hurricanes, reinsurers cut the limits they offered in high-catastrophe zones⁵
• Cedent quality matters. Reinsurers compete for the best-managed cedents with the best exposure data
• Catastrophe models set the market’s view of risk. The handful of vendors whose models the market relies on shape how it perceives risk

Regulation

Regulatory frameworks define minimum capital requirements: Solvency II in Europe, Risk-Based Capital (RBC) in the US, the Bermuda Solvency Capital Requirement (BSCR),¹⁶ LAGIC (the Life and General Insurance Capital framework, administered by the Australian Prudential Regulation Authority, APRA) in Australia.¹⁷ Solvency II internal models, and the Swiss Solvency Test on either its standard or internal models, compute their requirements directly on modelled loss distributions. Reinsurers’ own economic-capital models work the same way, for their own view of the capital they need. The measures are in the style of Value at Risk (VaR) and Tail Value at Risk (TVaR): the methods this site teaches on the Metrics pages.¹⁸

Standard formulas use the models less, or not at all. The US RBC catastrophe charge takes a few figures from the catastrophe model rather than the whole distribution: for each covered peril (hurricane and earthquake, with wildfire added in 2026), the company’s modelled annual loss after reinsurance that has a 1% chance of being exceeded in any year. The charge combines the perils’ figures and adds a small charge for the risk that reinsurers fail to pay.¹⁹ The Solvency II standard formula does not use a catastrophe model for natural perils: for direct insurance and proportional reinsurance it applies prescribed factors to the sums insured in each geographic zone, and it charges non-proportional property reinsurance, the excess-of-loss business this site models, on its premium.²⁰

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What the participants trade is a small set of contract structures, proportional and excess of loss, and each structure transfers a different part of the risk.

Footnotes

1. IRMI, “Brokerage market” and “Reinsurance intermediaries”, IRMI Insurance Glossary. Reinsurers writing through intermediaries are what IRMI calls the brokerage market, this page the broker market, since brokerage is also the fee; those that do not are the direct market. Donald Mango, “Reinsurance Market Microstructure”, International Actuarial Association, 2007, §2, which analyses large treaty placement in the broker market, where the broker holds the order book of reinsurers’ quotes and sets the firm order terms. Later footnotes cite it in short form. ↩

2. Insurance Journal, “Gallagher Completes $3.25B Purchase of Willis’ Treaty Reinsurance Brokerage Business”, December 2021. Willis Re passed to Arthur J. Gallagher and trades as Gallagher Re. Insurance Journal, “Guy Carpenter Rebranded as Marsh Re”, September 2026. Guy Carpenter became Marsh Re on 1 September 2026, after the parent’s rebrand from Marsh McLennan to Marsh. Howden Group Holdings, “Howden Tiger to become Howden Re”, 2024. The Howden Re name. ↩

3. Aon, 2025 Global Catastrophe Risk Management Survey, August 2025. Forty-eight percent of respondents do not license a catastrophe model and rely on their reinsurance broker for catastrophe modelling, and respondents with small teams rely on the broker’s analytics for portfolio risk management and catastrophe response as well. Aon is one of the brokers whose influence the figure describes. Mango, “Reinsurance Market Microstructure”, §2, on the broker as the only party that sees every quote. ↩

4. Insurance Journal, “Property Data and Info Provider CoreLogic Rebrands to Cotality”, March 2025. The rename; older material still says CoreLogic. ↩

5. Lloyd’s, Minimum Standards MS7: Reinsurance Management and Control, January 2021, RI 1.1. A managing agent’s board-approved reinsurance purchasing plan must set acceptance criteria for reinsurers, among them “the minimum level of acceptable financial strength of counterparties … i.e. minimum financial strength rating”. The standard binds Lloyd’s managing agents; it establishes that the rule exists and is mandated in one major market, not that every cedent worldwide operates one. Mango, “Reinsurance Market Microstructure”, §3, which records reinsurers cutting limits in high-catastrophe zones after AM Best and S&P changed their catastrophe capital charges in the wake of the 2004 and 2005 hurricanes. ↩ ↩²

6. Andy Polacek, “Catastrophe Bonds: A Primer and Retrospective”, Chicago Fed Letter No. 405, Federal Reserve Bank of Chicago, 2018. Traces the demand to Hurricane Andrew, after which eight insurers failed, and to the Northridge earthquake, whose $12.5 billion of insured losses exceeded all the earthquake premium collected in California over the previous eighty years; dates the first cat bonds to 1997, with issuance low until Hurricane Katrina and at record levels in 2006 and 2007. ↩

7. Aon, Reinsurance Market Dynamics, April 2026. Global reinsurer capital $785 billion at year-end 2025: traditional $649 billion, alternative $136 billion. ↩

8. Artemis, “What is collateralized (collateralised) reinsurance?”. Full collateralisation is what lets ILS funds and other unrated vehicles take a line on major reinsurance programs, and “normally the collateral posted is equal to the full reinsurance contract limit, minus the net premiums charged for the protection”. Lloyd’s, Minimum Standards MS7, RI 1.3, which sets out the collateral forms a syndicate may accept, among them cash and assets in trust, letters of credit, and funds withheld, and treats collateral short of the full limit as unprotected exposure. ↩ ↩² ↩³

9. Alexander Braun and Carolyn Kousky, Catastrophe Bonds, Wharton Risk Management and Decision Processes Center, July 2021, pp. 5–6. “The common forms are proportional payouts and binary payouts”: under a proportional payout the loss of principal rises with the amount by which the underlying losses exceed the attachment point, reaching a full loss at the exhaustion point; under a binary payout “a predefined amount of principal (usually 100%) is transferred to the sponsor as soon as the underlying insurance losses reach the attachment point”. The primer also gives the average cat bond maturity as three years, with maturities up to five years uncommon. ↩ ↩²

10. Artemis, Catastrophe bond and ILS deal directory, a public record of each catastrophe bond tranche with its spread and modelled expected loss at issuance. Alexander Braun and Carolyn Kousky, Catastrophe Bonds, Wharton Risk Management and Decision Processes Center, 2021. Issuance requires a specialist modelling firm to estimate the trigger probability and the investors’ expected loss, on the windstorm and earthquake exposures that dominate the traditional market. ↩

11. Jonas Kaiser, “Cat Bonds – A Threat to Traditional Reinsurance?”, Gen Re, February 2025: “Reinsurance treaties are commonly one year, although multi-year treaties are certainly possible”, cat bonds run for “three years being the standard”, and “there is value in partnership and long-standing relationships … Cat Bond investors, however, are completely opportunistic”. Gen Re is a traditional reinsurer writing about a competing form of capital. American Academy of Actuaries, Insurance-Linked Securities and Catastrophe Bonds, public policy issue paper, June 2022, p. 15: “relationships with reinsurers tend to be long term”. Aaron Koch, Measuring the Impact of “Locked Collateral” on Collateralized Reinsurance Returns, Milliman, April 2016, p. 3: collateralised reinsurance deals are “private, customizable” and “require specialized underwriting expertise and a network of relationships”, are “generally less liquid than catastrophe bonds”, and run for “a one-year period for most deals”, though collateral lockup after a loss can make them “multiple-year commitments even if the risk period is only one year long”. Artemis, “Rule 144A Catastrophe Bond”: catastrophe bonds sold to institutional investors under Rule 144A mean that “investors and institutions can trade what could typically have been restricted securities amongst themselves”. ↩ ↩²

12. Lockton Re, “Re Compensation Disclosure”. Brokerage on pro rata placements is usually 1%–2.5% of gross ceded premium and on excess-of-loss placements usually 5%–10%, with 15% into certain markets such as London. ↩

13. Mary A. Weiss, “Underwriting Cycles: A Synthesis and Further Directions”, Journal of Insurance Issues, Vol. 30, No. 1, 2007. A review of the underwriting-cycle literature: under the capacity-constraint account a loss shock depletes capital and tightens supply until higher prices rebuild it, after which slack capacity returns and prices fall. The review is candid that no single theory accounts for every episode. Mango, “Reinsurance Market Microstructure”, §3, which traces the 2006 US catastrophe market through the 2004 and 2005 hurricanes, the new firms and capital that followed them, and the model and rating-agency changes that moved both price and available limit. ↩

14. Aon, Reinsurance Market Dynamics, April 2026, which describes 1 April as “the main renewal for insurers in Japan, Korea and India” and June and July as “key renewals for U.S. insurers, in particular for those in windstorm-exposed southern U.S. states like Florida”; Aon, Reinsurance Market Dynamics, April 2025, which names June and July as the key renewal dates for insurers in the U.S., Australia and New Zealand; Hannover Re, “Hannover Re confirms guidance for 2024”, January 2024, which reports 62% of its traditional property and casualty reinsurance up for renewal on 1 January, with substantial Americas business not renegotiated until 1 June and 1 July. ↩

15. Mango, “Reinsurance Market Microstructure”, §2.3 and §2.5. Firm order terms are a single non-negotiable price that each reinsurer takes a share of or declines, a reinsurer quoting far from its peers has limited effect on that price, and the price moves that persist are systemic ones common across many reinsurers. On property catastrophe specifically, pricing “is so heavily model driven that variations in quotes (asking prices) among reinsurers is greatly reduced”. ↩

16. Bermuda Monetary Authority, “Standards and Regulations”, which describes the Bermuda Solvency Capital Requirement as the Authority’s risk-based capital model for the insurance sector, and The Bermuda Capital and Solvency Return: General Business Instructions Handbook, 2018, which sets out the calculation in full. The handbook predates the 2024 commercial-insurer reforms. ↩

17. APRA, “Insurance capital: AASB 17 and LAGIC updates — Information paper”, 2022. LAGIC is APRA’s capital and reporting framework for life and general insurers; APRA is the regulator, not the framework. ↩

18. EIOPA, “Calculation of the Solvency Capital Requirement”, Solvency II Single Rulebook (Directive Art. 101). The SCR is the Value at Risk of basic own funds at a 99.5% confidence level over one year. Federal Office of Private Insurance, “Technical document on the Swiss Solvency Test”, 2006, §2.4. Target capital is measured with the expected shortfall (TailVaR) at the 99% level of the one-year change in risk-bearing capital. ↩

19. NAIC, “Calculation of Catastrophe Risk Charge Rcat”, extract from the year-end 2024 property/casualty RBC blanks and instructions, pp. 46–48 and schedule PR027. The charge “is calculated by multiplying the RBC factors by the corresponding modeled losses and reinsurance recoverables”, and “the risk applies on a net basis with a corresponding contingent credit risk charge” on what reinsurers owe; companies report modelled losses for the “worst year in 50, 100, 250, and 500; however, only the worst year in 100 will be used”. An aggregate exceedance probability (AEP) basis “is preferred”, and an occurrence exceedance probability (OEP) basis is permitted. A factor of 1.000 applies to the net modelled loss and 0.018 to the reinsurance recoverables (p. 48), and schedule PR027 combines the per-peril charges as the square root of the sum of their squares. At year-end 2024 “the catastrophe risk charge is for earthquake and hurricane risks only”. NAIC, 2026 Spring National Meeting Synopsis, March 2026, pp. 17 and 22, which records the adoption of proposal 2025-20-CR (Wildfire Rcat Implementation); it “adds wildfire information to the current hurricane and earthquake information in the Rcat portion of the property/casualty (P/C) RBC formula”. Convective storm losses are collected for information only. The synopsis does not state the first year-end the wildfire charge applies to. ↩

20. Commission Delegated Regulation (EU) 2015/35, Official Journal of the European Union L 12, 17 January 2015. Article 120 sets out the natural catastrophe risk sub-module as windstorm, earthquake, flood, hail, and subsidence, and Articles 121 to 125 give each peril’s capital requirement. For windstorm, Article 121(6) weights the sum insured in each risk zone by a prescribed risk weight (Annex X) and a regional factor (Annex V); this zonal method covers insurance and proportional reinsurance exposures in the listed regions, and exposures outside those regions are charged on premium (Article 121(8)–(9) for windstorm). Non-proportional property reinsurance has its own premium-based sub-module: EIOPA, “Sub-module for catastrophe risk of non-proportional property reinsurance”, Solvency II Single Rulebook, Delegated Regulation 2015/35 Art. 127 (consolidated numbering), which sets the requirement from “an estimate of the premiums to be earned … during the following 12 months” on each such contract. No catastrophe model output enters any of these calculations. ↩