The reinsurance market is set to be a “challenging environment” next year which Beazley expects to see shift significantly, says Chief Executive Officer Adrian Cox.
During Beazley’s Q3 22 earnings call, Cox stated that a “properly priced reinsurance and a disciplined reinsurance market is positive for the insurance industry overall”.
He also added that a shift is a positive thing and should “encourage discipline behaviour in the insurance industry as well.”
Cox said that he expects to pay more for reinsurance next year, however because of Beazley’s strong relationship with reinsurers, he is confident that the company’s programs should retain its integrity in 2023.
With the January 1 reinsurance renewals looming closer, Cox also cited speculation that reinsurance rates could potentially increase “from the mid-20s to 50s and higher”, and they could also include a significant change in attachment points.
“I do think that the reinsurance market will go through a structural change at 1/1 and that will have an impact on the property insurance book,” Cox said.
Furthermore, Cox noted that Beazley would aim to capitalise on the opportunity across its property re/insurance books as the industry becomes more forward-looking when it comes to climate risk.
He added that the opportunity “emerged faster than we originally thought” but that it also remained a positive shift and would give Beazley “more opportunities” as a specialty insurer.
Meanwhile, Beazley also reported an estimated $120 million Hurricane Ian loss, net of reinsurance. The loss was bigger than its Q3 22 cat margin, but because the carrier’s incurred claims were slightly better than anticipated, the Ian loss was offset.
Cox also noted that market sentiment has moved materially in the property world within both insurance and reinsurance, and to a certain extent in the reinsurance world overall.
He stated that Beazley believes that market conditions for the rest of the year and into 2023 are “more favourable” than they thought they would be in the summer and that will be reflected in Beazley’s business plan that they will finalise at the end of the year.
In its latest results, Beazley reported that it had seen gross written premiums increase by 22%, compared to the first nine months of 2021
