Each reinsurance renewal season sees brokers feverishly chasing down the best premium prices in the market. Frequently, when the panel of reinsurers offer their submissions for a slice of treaty, the broker will discover that the treaty is oversubscribed and will have to go back to the markets to reduce each reinsurer’s commitment by a certain percentage, in a process called signing-down—but the price stays the same.

During this price-discovery process, brokers do their best to get an indicative price of what the market will accept, but “every time a risk is oversubscribed, it means the broker has gotten the price wrong and the ceding company has paid too much; it’s like you’ve left money on the table—perhaps millions of dollars for a single treaty,” according to Sean Bourgeois, founder and chief executive officer of Tremor, the Boston-based technology firm.