Munich Re's retrocession and sidecar program remains steady at $1.55 billion for 2025.

Munich Re has renewed its retrocessional reinsurance program for 2025, maintaining $1.55 billion in coverage through a combination of traditional retrocession and capital market instruments, including sidecars and catastrophe bonds. This level remains consistent with the previous year.

The company's collateralized reinsurance sidecar program has been renewed at $650 million for 2025, matching the amount raised in 2024. According to Munich Re, these sidecar agreements include quota share cessions for specific business lines, secured by $650 million.

Additionally, Munich Re has once again secured its Eden Re II reinsurance sidecar at $150 million for 2025. Investor PGGM also expanded its target allocation range for the Munich Re sidecar partnership, Leo Re, doubling the range to €500 million–€1 billion, reinforcing its role as a key retrocession capital source for the reinsurer.

Munich Re's traditional retrocession placement remains steady at $600 million for 2025, benefiting from a favorable market while balancing pricing and placement volume. The reinsurer also continues to leverage catastrophe bond protection, including the $300 million Queen Street 2023 Re DAC issuance, which provides U.S. hurricane retrocession coverage.

In 2024, the company optimized its U.S. hurricane risk exposure through its retrocession program. This year, it is also addressing California earthquake risk by increasing external retrocession. Munich Re’s multi-format retro program offers scalability and access to diverse capital sources, utilizing industry-loss warranties, risk swaps, indemnity retrocession, sidecars, and catastrophe bonds.

As Munich Re expands through the hard market, its retrocession strategy plays a key role in managing probable maximum losses (PMLs). While the retro program has grown compared to 2023, its stability year-over-year underscores Munich Re’s focus on maximizing underwriting profitability while market conditions remain favorable.