Reflecting on several years of large global catastrophe losses and unprecedented systemic shocks, Swiss Re Group Chief Underwriter (CUO) Thierry Léger says that the reinsurance industry has “proven its role as shock-absorber.”
Speaking to Reinsurance News ahead of the 2022 Monte Carlo RVS event, Léger addressed the difficult conditions that reinsurers continue to face, as well as the ongoing impact of the global pandemic that has caused this key industry gathering to be postponed for the previous two years.
“What we see at the moment is high uncertainty in the geopolitical environment combined with a challenging economic outlook, particularly in Europe given the looming energy crisis,” the Swiss Re executive noted.
But despite these challenges, reinsurers do have some positives to reflect on, he added.
Risk awareness, for instance, has “increased massively” on the back of the COVID-19 pandemic and large cat events, Léger argued, and the industry continues to be “well positioned” to support clients through this difficult period.
“The volatile environment comes with many challenges for our clients,” he told Reinsurance News. “In such times, clients are looking for a partner who can provide stability and this is exactly where we come in.”
“We’re a long-term partner and shock absorber to our clients. We are here to help them through these volatile times with our risk-taking abilities, large balance sheet and well-diversified and -priced portfolio.”
With the industry returning to Monte Carlo this week after a two-year hiatus, Swiss Re’s CUO expects that these growing risks will feature heavily in RVS discussions, ahead of January 1 renewals.
“Generally, the market conditions are driving up demand and rates which is a positive for the industry,” Léger said. “However inflation risk needs to be carefully managed,” he warned.
Léger’s cautionary words on inflation echo the sentiments of Swiss Re CEO Christian Mumenthaler, who said in a recent video interview with our ILS-focused sister publication, Artemis, that the impacts of inflation and adapted models have, for the most part, “eaten up” any beneficial pricing increases at renewals this year.
