The Return of the True Excess-of-Loss Aggregate: Why Brokers Are Reviving a 1990s Structure for 2026 Frequency Risk
For years, the words “aggregate excess-of-loss” triggered eye-rolls in reinsurance corridors. Scarce capacity, sky-high pricing, multiple reinstatements, and endless adjustment disputes had turned what was once an elegant frequency solution into an expensive, complicated headache. Many cedents simply gave up and accepted the volatility.
That is changing fast. In 2025 renewals we have placed more pure excess-of-loss aggregate layers than in the previous decade combined, and the momentum heading into 2026 is even stronger. A cleaned-up, back-to-basics version of the 1990s classic is emerging as the single most cost-effective way to buy meaningful protection against the frequency-driven losses that now dominate global nat-cat books.
Why Traditional Aggregates Became Unusable
Classic aggregate excess-of-loss covers looked attractive on paper: pay when cumulative losses exceed a high attachment (say $750m or $1bn retained), recover up to a limit with unlimited free reinstatements. In practice, they suffered from four fatal flaws:
– Reinsurers loaded the price for unlimited reinstatements they feared would never stop.
– Hours clauses and occurrence definitions became battlegrounds.
– Cedents paid hefty premiums even in low-loss years because the attachment was rarely breached.
– Capacity evaporated when frequency actually materialised.
The result? By 2022–2023, most markets quoted aggregates only reluctantly, at rates-on-line that could exceed 300–400% for modest limit. Many buyers walked away.
The 2026 Reboot: Pure, Simple, and Half the Price
The reinvented structure strips away every pain point and keeps only what works:
– High attachment (typically 80–110% of expected annual retained cat loss)
– Low limit (usually 50–150% of the attachment, never more)
– Zero reinstatements — one bite of the cherry
– Clean occurrence definition (often parametric or industry-loss triggered)
– No hours-clause debate — the layer responds to cumulative paid/IBNR on a losses-occurring basis
Because the layer can only ever pay once, reinsurers price it aggressively — typically 40–60% of the cost compared with a traditional multi-reinstatement aggregate offering similar expected value. In several 2025 placements we achieved rates-on-line below 100% for layers attaching at 100% of budgeted retention.
Why Reinsurers Suddenly Love This Structure Again
1. Known maximum exposure — no reinstatement tail means the worst-case scenario is capped and easily modelled.
2. High attachment = attractive risk-adjusted return in a soft property market.
3. Frequency, not severity, drives the loss — exactly the risk many reinsurers want to diversify into when peak-zone cat pricing is under pressure.
4. Simple adjustment — often settled via parametric index or pre-agreed loss run, eliminating years of leakage.
We are seeing traditional reinsurers, ILS funds, and even start-ups competing aggressively for these layers.
Six Placement Tips That Unlock the Best Terms
1. Attach just above your worst historical retention (not your budget) — credibility matters.
2. Offer a choice of triggers: paid losses, IBNR-inclusive, or industry-loss index — flexibility earns better pricing.
3. Cap the limit at 50–75% of the attachment — reinsurers hate “deep” aggregates even without reinstatements.
4. Accept a modest profit commission or no-claims bonus — turns the layer into a true partnership deal.
5. Bundle with a small parametric frequency shield lower down — shows you are serious about managing the layer erosion.
6. Start the conversation early — these layers are capacity-constrained once the January rush begins.
Where This Fits in a Modern 2026 Programme
The pure aggregate is not a replacement for the traditional tower — it is the missing piece:
– Robust per-occurrence tower with reinstatements for severity.
– Parametric working-layer plugs for speed.
– Pure excess-of-loss aggregate sitting above expected retention for frequency smoothing.
– Optional high excess cat layer or cat bond for tail risk.
Together, this stack delivers broader, more predictable protection than most 2020-era programmes at a materially lower total cost.
Frequency Protection Is Back — and Cheaper Than Ever
For years we told clients that aggregate protection against secondary-peril frequency was either unavailable or unaffordable. That is no longer true.
The pure excess-of-loss aggregate — stripped of reinstatements, complexity, and pricing baggage — is enjoying a quiet renaissance because it solves exactly the problem the industry faces today: too many mid-sized losses, not enough catastrophic ones to hit the tower tops.
At half the price of the old structures and with capacity queuing up to write it, this 1990s classic has become one of the sharpest tools in the 2026 reinsurance toolkit.
Photo from freepik