Juan Andrade, President and CEO of Everest Re Group, has said that the reinsurer continues to see “good opportunity” in casualty business, despite fears of escalating claims inflation.
Speaking as part of an earnings call alongside the release of Everest Re’s 2019 results, Andrade said that the company had provided proportional casualty treaties to some key clients at the January renewals.
He also pointed to improvements in primary casualty, particularly in general liability, as well as for excess casualty.
John Doucette, EVP, President and CEO of the Reinsurance Division at Everest Re, explained that casualty reinsurance had seen a “directional improvement” in rates recently.
In addition, it has benefitted from primary rate increases and improved terms and limit contraction, which have together resulted in a better priced and better balanced book.
“There’s been a lot of talk about social inflation and increased loss trends in casualty,” Doucette said during the earnings call. “We believe this is a reversion to the long-term mean as opposed to something new.”
“And this reversion to the mean in trend and loss development is something that we have been underwriting for, pricing for and embedding in our trend factors for several years, prior to this being in the headlines now.”
Looking ahead, Everest Re sees a mixed casualty reinsurance market continuing into 2020 with some reinsurers writing more and some writing less.
However, this will be a function of perception of loss trends, market share and underwriting actions taken over the last several year, Doucette said, maintaining that Everest Re remains optimistic about the current market.
At January 1, Everest deployed more capacity in retro, its PURPLE product, loss-affected territories with rate improvements, casualty, specialty, and facultative lines globally.
Conversely, the company continues to re-underwrite poor performing accounts or accounts which did not have strong pricing.
In terms of facultative renewals, Doucette said that Everest Re had seen a significant increase in the number of opportunities both in casualty and property, in the US as well as internationally.