As a financial analyst at a major institution, you are tasked with assessing the implications of changes in market conditions on your institution's financial positions. Your institution has provided default protection for the senior tranche of a Collateralized Debt Obligation (CDO).

Given this scenario, evaluate the impact if there is a significant drop in the default correlation of the assets within the CDO compared to the correlation used during the initial pricing of the CDO tranches, with all other variables remaining unchanged. How does this change in default correlation affect your institution's risk exposure?