Europe’s top cedents reported a double-digit hike in cessions for 2015 compared to the previous year. The trend stems from their taking advantage of cheap and bountiful reinsurance capacity, A.M. Best said in a new report.

The continent’s 20 largest cedents saw their cessions jump 17 percent, versus much smaller increases in premiums, even with retention ratios down slightly versus the previous year.

A.M. Best said that the soft reinsurance market is driving this trend, which has given many “enhanced negotiating powers to benefit from this efficient form of contingent capital.”

With that boosted negotiating power in hand, cedents are getting more cover and locking in favorable rates that have multi-year reinsurance arrangements. Larger cedents are also continuing to centralize their reinsurance buying, A.M. Best said.

Beyond the softer market, cedents may also buying more reinsurance because of changing business models, A.M. Best said. One example of this involves carriers such as Allianz, Axa and Mapfre that have a strong track record in personal lines. A.M. Best noted that these companies are either reinforcing or expanding their product range in both commercial and specialty lines, areas that often need more reinsurance force.

Once again, Lloyd’s of London remains the largest European non-life group cedent, with more than EUR 7.7 billion in non-life premiums, versus EUR 6.7 biliion in 2014. Chubb landed in second, with EUR 5.58 billion in premiums ceded during 2015, up from EUR 4.5 billion in 2014.

Third-placed Zurich Insurance Group reported EUR 5.1 billion in premiums ceded during 2015, versus EUR 4.5 billion in 2014. Allianz, which came in fourth, booked more than EUR 4.9 billion in ceded premiums, versus EUR 3.9 billion in 2014. MAPFRE, which came in fifth, said It had over EUR 3.4 billion in ceded premiums in 2015, compared to just under EUR 2.6 billion in 2014.

Source: A.M. Best