For the second year running we’ve collaborated with our ILS focused sister-site Artemis to conduct a survey designed to take the temperature of the global reinsurance market.
Overall, approximately 72% of survey respondents provide input to, or are responsible for reinsurance buying decisions, which is an increase of roughly 10% on the first edition of the survey.
One of the most notable differences in this year’s survey versus last year’s, is the sentiment around reinsurance price expectations at the January 1st, 2020 renewals.
Another year of catastrophe losses and continued loss creep from prior year events has driven an expectation of rate increases across the majority of lines at 1/1, which is a much more positive tone than last year when the expectation was for relatively flat pricing.
The reduction and control of catastrophe exposure again tops the list of the most important drivers of reinsurance buying decisions at the key January renewals, followed by earnings protection and capital efficiency.
Data collected from the survey shows that almost half of respondents expect to purchase about the same amount of reinsurance at 1/1, while 37% expect to buy a little bit more, which is relatively unchanged year-on-year.
For the 2019 edition of the survey we asked reinsurance market participants what the biggest challenges, threats, or disruptions to the market over the past year were. Loss creep from typhoon Jebi came out on top, followed by creep from hurricanes & AOB impacts.
Interestingly, climate change came in third, followed closely by the ongoing efforts at Lloyd’s and regulatory change. Perhaps somewhat surprisingly, tech disruption was viewed as the least challenging over the last 12 months.
Regarding Lloyd’s of London and specifically the Future at Lloyd’s Blueprint, and almost 62% of survey respondents feel that these initiatives will not be enough to turn the market’s fortunes.
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.