Executives and leaders from across the insurance and reinsurance sectors are seeing strong demand for protection and have called on the industry to work to leverage its strengths in such a demanding marketplace.
At the 2022 meeting of the reinsurance industry in Baden-Baden, senior industry leaders discussed how the insurance and reinsurance industry can provide the needed capacity and solutions to address the evolving exposure environment, as demand for protection continues to rise.
At the fast-approaching January 1st, 2023, reinsurance renewals, a supply / demand imbalance is expected, notably in the catastrophe space, as some providers have retreated from this part of the market in order to reduce volatility, while demand from buyers is on the rise.
“Demand for reinsurance is very strong and continues to increase,” said Jean-Jacques Henchoz, Chairman of the Executive Board at Hannover Re. “If we consider the long-term trends, climate change is a challenge for our industry, but also creates huge potential. If you look at emerging markets and in particular insurance penetration levels in some Asian markets, changes in technology, demographic shifts, urbanisation – these are all developments which are generating significant opportunities for our industry… the challenge for us is to push the frontiers of insurability.”
During Guy Carpenter’s Baden-Baden Reinsurance Symposium, held on October 23rd, Massimo Reina, CEO, Europe, underlined the robust performance of the sector in spite of demanding conditions, and urged the re/insurance industry to work together to navigate the challenges.
“The European market continues to deliver strong results over the cycle, and to differentiate itself within the global (re)insurance landscape,” said Reina.
“With all parts of the industry working together, we can maintain the strength of existing relationships and reach the right solutions for cedants and reinsurers. At Guy Carpenter, we are confident that positive outcomes are achievable in today’s environment,” he added.
Ann Haugh, CEO of AXIS Re, also commented on the numerous factors currently impacting the insurance and reinsurance world, including volatility in the property cat market, a reduction in retrocession capacity and also capacity from the insurance-linked securities (ILS) space, as well as the increased frequency and severity of events, and the war on talent.
“In such a demanding marketplace, it is imperative that our industry works to leverage its strengths. We must look at how we can elevate our leadership positions in our chosen markets,” said Haugh. “We must be fully focused on serving our customers while maintaining a smart but disciplined underwriting approach. We must reserve prudently by reflecting appropriate loss costs in our pricing models. Finally, we must continue to invest in our talent and our unique organizational cultures to attract and retain the best people. At Axis Re, we see all these areas as critical to our long-term success.”
The closing presentation of the Guy Carpenter symposium featured Thierry Derez, CEO, Covéa, who urged the re/insurance industry to take a leading role in delivering the solutions needed to assist clients faced with numerous hurdles.
“The current turmoil is challenging for everybody, but our responsibility is to stop complaining,” said Derez. “From a financial viewpoint, the rising interest rates create buffers in the long run. From a technical viewpoint, the material to be insured is growing. From a social viewpoint, there is appetite for protection.
“If the insurance and reinsurance industry is not able to respond to this extraordinary demand, then other industries will look to find the solutions.”
