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> Global Business > Reinsurance&Fronting



SGI has been operating outward reinsurance business to diversify risk and to increase its underwriting capacity in the areas of Q/S, XoL(Excess of Loss) Treaty and Facultative Reinsurance. The company’s cession book consists of surety bonds largely focused on contract bonds and credit insurance. The company maintains the highest levels in its ceding program by periodically monitoring the risk adequacy of its performance.

In 2016, inward reinsurance premium rose by approximately 31.4% from USD 113.9 million to USD 149.7 million. Combined ratio also showed a favorable figure of 99.2% accumulating more underwriting expertise, it is expected that inward reinsurance business may become one of SGI's major future drivers of growth.


An overseas project owner may inform a contractor that a bond needs to be provided by a local insurer. However, it is quite rare for these insurers to issue bonds, since it is difficult for them to assess a contractor’s credit standing. In such case, an insurer in the contractor’s country (i.e., the “instructing company”) may request its counterpart (i.e., the “fronting company”) based in the country in question to issue a bond enabling the contractor to obtain a foreign bond easily and promptly. This process is called “fronting.” After the bond has been issued, the fronting company cedes the risk to the instructing company. As a result of this reinsurance scheme, it is the instructing company that actually assumes the risk.

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