In light of hurricane Harvey and the potential impact of hurricane Irma, John Cavanagh, the outgoing Chief Executive Officer (CEO) of Willis Re, highlighted the “massive” opportunity the reinsurance industry has to show what it can do.
“This is a massive opportunity for us, as a reinsurance industry, to shine,” said Cavanagh, speaking at the 2017 meeting of the global reinsurance industry in Monte-Carlo.
Cavanagh continued to explain that in the current marketplace the industry must deliver what it promised to its clients.
Loss estimates from Harvey have started to come through, although the actual economic and insured loss will take some time to materialise. Hurricane Irma remains on track to hit Florida, and Cavanagh stressed the importance of the market acting in the right way, saying that he expects the industry to react admirably in light of the storms and the ongoing soft market landscape.
Irma could potentially be a very large event for the reinsurance industry, with some in the industry suggesting that it could spark a turn in the market should a substantial volume of capital exit the space post-event.
However, the market is flush with both traditional and alternative capital, as well as an expectation that much is sat on the sideline waiting to enter. The strong capitalisation was highlighted by Willis Re, with speakers suggesting that capital is ready to enter post-event, so it could be that any pricing uptick is limited in light of this.