John Doucette, President and CEO of the Reinsurance division at Everest Re, has said that the company is seeing a flight to quality and a “flight back to the traditional model” ahead of the 2021 renewals.
Speaking alongside the release of Everest Re’s Q3 results, Doucette commented on how the reinsurer is looking to orient its books over the next year.
Everest Re reported a $243.1 million net income for Q3 up from $104.4 million in the prior year quarter, although operating income fell to $97 million, down from $138.4 million previously.
It also reported catastrophe losses of $300 million due to the impact of Hurricanes Laura, Isaias and Sally, wildfires in California and Oregon, and other events including the Midwest United States Derecho windstorm.
And pandemic losses for the quarter hit $125 million, bring Everest Re’s total COVID-19 losses for the year to $435 million.
Despite these losses, Doucette says the firm is “pretty bullish on many opportunities across many lines of business” as it heads into the January 1 renewals.
“We’re seeing the flight to quality and a flight back to the traditional model, which we think will greatly benefit us across many lines,” he explained. “Our global clients are continuing to want to buy more and buy more from people like Everest. So that’s a significant opportunity.”
Doucette added that Everest Re is confident it has both the capital and the expertise to take advantage of opportunities across a variety of business, including property and casualty, specialty, marine and aviation, political risk, trade, credit and surety.
“We see opportunities in all of those,” he said. “We expect the casualty market, partially because the security requirements on reinsurance panels for our long-tail business, casualty professional, that’s hard for a lot of people to get access to that business. So, we have the distribution and the relationships and, again, the underwriting expertise. So we expect to see a strong 2021 when it comes to the long-tail.”
Doucette continued: “But, of course, we’re looking at the most dislocated property retro market we’ve seen in 15, 20 years. And so, again, we’ll look to deploy capacity and capital. And then, we spend a lot of time, and we’ve talked about this before, with dynamic capital allocation, not just between short-tail, long-tail, but then within each of the respective areas; what’s the best territory, what’s the best product, structure that we want to deploy.”
“And, so, it’s hard to know how that will all settle out. But rest assured, we are bullish about the opportunity presented to us and our ability to execute it going into 1-1.”