Denis Kessler, Chairman of the Board of Directors and Chief Executive Officer (CEO) of reinsurer SCOR, recently highlighted a promising future for the global reinsurance industry, driven by the expanding risk landscape, technological advances, and rising demand for protection across the world.
Speaking during the France domiciled reinsurer’s Q4 2017 earnings call, Chairman and CEO Kessler underlined the company’s strong position for the remaining 2018 renewals following a more favourable market environment at 1/1 as a result of 2017 catastrophe events, with many in the space expecting the positive rate momentum to persist.
At the same time, SCOR expects that rises in interest rates will benefit the company as it looks to maintain the execution of its investment strategy via redeploying assets and, Kessler also noted that SCOR is “confident in the future of reinsurance.”
“Overall, the reinsurance profession is not just one of the greatest and most fascinating in the world, it is also one of the most promising.
“The risk universe is expanding as new risks are developing and emerging alongside scientific progress and technological innovation, while the frontiers of insurability are constantly being pushed further back. Therefore, the raw material for the industry is growing,” said Kessler.
As noted by Kessler the risk landscape is constantly evolving, and at a fairly rapid pace.
Risks like cyber and terror continue to change with each attack or breach, and insurers and reinsurers are tasked with the challenge to create effective and affordable solutions, taking advantage of the opportunity while really meeting a market need.
The rise of InsurTech is increasingly entwining with the market’s desire for greater efficiency and lower costs, and it’s this disruptive force that provides re/insurers with an opportunity to expand the remit of risk transfer and look to narrow the huge protection gap (disparity between economic and insured losses post-event) that exists in all parts of the world.
“What is more, demand for cover is being boosted by the global economic recovery, the protection gap that remains extremely high on a global scale, and an aversion to risk is increasing with wealth and development in emerging countries,” said Kessler.
The protection gap is most prominent in emerging parts of the world where insurance penetration is dangerously low, but third and fourth-quarter 2017 catastrophe events showed how a lack of cover exists in some of the world’s most developed markets, such as flood in the U.S., revealing a vast opportunity for re/insurers in all parts of the world.
