Capital Motivated Reinsurance: Why Experience and Market Access Matter

Market Update from the Accident, Health & Life Team

What was once a niche solution has become an increasingly important strategic tool for health insurers seeking to address balance sheet, growth, and liquidity challenges. Over the last 24 months, the Capital Motivated Reinsurance (CMR) market has experienced notable growth and innovation, driven by increasing interest from regional health plans and large national health plans.

While market activity has accelerated, CMR is not a one-size-fits-all solution. The suitability, economic value, and capital impact of a transaction depend on an organization's unique financial profile, regulatory environment, growth strategy, and stakeholder objectives. Successful transactions require careful evaluation of both the benefits and potential trade-offs associated with reinsurance structures.

At Lockton Re, our Accident, Health & Life (AHL) team has been actively involved in numerous CMR transactions, helping clients assess whether reinsurance is an appropriate tool and implementing solutions aligned with their financial objectives.

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