Reinsurance News

There will be opportunities for continued price firming: Swiss Re CFO

10th May 2018 - Author: Luke Gallin

John Dacey, the Group Chief Financial Officer (CFO) of global reinsurer Swiss Re, noted improved rates in P&C business following the catastrophe events of 2017, but stressed an expectation that the market should have reacted stronger than it did, speaking during the firm’s Q1 2018 earnings call.

Swiss Re logoAs global insurers and reinsurer continue to report their first-quarter 2018 financial results, numerous management teams have noted improved rates and terms and conditions across the reinsurance segment in response to the 2017 catastrophe experience.

Large reinsurer Swiss Re announced its results last week, and during its investor and analysts’ call the group’s CFO said that rates have improved following events, although at a “variable pace, depending on region and segment.”

“Our expectation was with $140 billion of losses in 2017 the market should have reacted a little stronger than it did, part of this is both a supply and a demand issue. We are seeing people interested in additional and broader cover on the buying side, so the demand is there and supply is meeting that demand,” he added.

Dacey’s comments on rate improvements in the industry echoes that of other industry experts and executives, that while rates have improved, this wasn’t by as much as many and hoped for.

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Part of the reason is alternative capital, which continues to be attracted to the space and responded well to 2017 catastrophe events, further cementing its place in the global insurance and reinsurance landscape.

The April renewals didn’t bring a lot of new information in terms of pricing owing to its heavy focus on Japanese business, said Dacey. Adding that the June and July renewals will provide more colour on rates when U.S. loss-affected business renews.

“We believe there will be opportunities for continued firmness in the pricing,” said Dacey.

Competition in the reinsurance sector remains intense, from both traditional and alternative providers of capital, and with the expectation of continued positive rate momentum at mid-year renewals it will be interesting to see how companies respond and if discipline is maintained.

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