The second annual survey by our ILS focused sister-site Artemis has identified expertise and diversification as the top two key issues for the reinsurance industry going into 2020 and beyond.
This year’s survey included responses from hundreds of identifiable market participants, including numerous company CEOs and senior decision makers.
Out of a list of 12 options, respondents identified expertise as the most important issue by a significant margin.
The popularity of this answer seems to indicate that many in the reinsurance industry are mindful that an injection of fresh talent may be needed to revitalise the market over the next few years.
It is also indicative of the need to hire more people with insight into newer areas of relevance for the reinsurance industry, such as cyber, climate change, and new technologies.
In second place, the Artemis survey data showed that participants ranked the need for further diversification in terms of line, peril and geography.
Behind this, technology was singled out as the third-most pressing issue for the market to address in 2020 and beyond.
Notably, this ranking contrasts dramatically with the priority afforded to ‘relationships with insurtech start-ups’, which was the least popular of the 12 options.
The discrepancy suggests that most reinsurers will be looking to focus on developing in-house technological capabilities, rather than partnering with external firms.
This explanation would also match with the status of ‘expertise’ as the top answer in the rankings, as reinsurers increasingly aim to grow their internal tech capabilities.
In fourth and fifth place, broker relationships and access to risk were given a similar level of importance by survey respondents, while access to third-party capital came sixth.
After this was the ability to create new sources of revenue, scale (bigger is still better), and specialism (niche or focused is still a valid model).
The least popular answers by some margin were diversification into primary insurance, willingness to go direct, and relationships with insurtech start-ups, which all ended up with a comparatively small share of the vote.
Overall, approximately 72% of survey participants said that they provide input to, or are responsible for reinsurance buying decisions, which is an increase of roughly 10% on the first edition of the survey.
As we move into 2020, expertise, diversification, technology, broker relationships, access to risk and access to alternative capital are viewed as the most important elements in reinsurance. Furthermore, a greater number of respondents expect to leverage the same amount of third-party capital next year as they did this year, while 37% expect to use a little more.
As the reinsurance market moves towards the January 2020 renewals season, the full results of the global reinsurance market survey provide a useful test of the temperature of the industry at this time, offering insight on sentiment and expectations.
We’ve made the full results of this global reinsurance market survey freely available to our readers and we’re happy to discuss the results with industry participants and to discuss sponsorship enquiries from those looking to raise their profile in the reinsurance sector. Contact us.
Analyse the results of our global reinsurance market survey here.
