The (re)insurance industry was the first information age business. After all, Lloyd’s itself was established more than three-hundred years ago in a London coffee house where news and information could be shared among underwriters.
And now The Insurer has arrived as a new publication with the aim of becoming an authoritative source of information and analysis on the global P&C specialty and reinsurance markets and the risk capital that flows in and out of it.
We will be the industry’s advocate but also independent, passionate and fearless in our coverage. At a time of profound change, we will be a constant source of reliable and trusted information on the markets.
The Insurer’s predecessor, Re-Insurance, was first published as Reinsurance Magazine in 1969 – but the name has run its course, just as print has been overtaken by digital in the information business.
As the boundaries between insurance and reinsurance have blurred, so The Insurer better represents our aim to become the industry’s authoritative voice.
With our US office set to open in January 2019 and with a growing and passionate team of experienced (re)insurance journalists and analysts, we look forward to serving all our readers for the next fifty years with immediate news, surgical analysis and thought-provoking comment on our industry.
We will be the industry’s advocate but we will always be independent. Our mission always will be to provide trusted information; to provide our readers with insight that gives them and their companies a competitive edge.
“As the boundaries between insurance and reinsurance have blurred, so The Insurer better represents our aim to become the authoritative source of information and analysis on the global P&C specialty and (re)insurance markets”
But why now? And what can we do to keep our readers better informed of the evolving landscape of specialty underwriting and distribution of complex risk?
At a time when much has been written about a sector struggling with an “experience gap”, our expanding team of journalists will soon have amassed over 40 years covering it and with editorial offices in London and New York.
We have certainly not lost our appetite for breaking exclusive news first. However, we believe our experience can bring valuable context to market developments that can sometimes get lost in the noise.
Take for example size. We’re starting small. We’re effectively in start-up mode even though over 15,000 industry professionals now rely on our coverage on a daily basis (all of whom have signed up in 2018).
But there is no doubt that almost everywhere else across the specialty insurance and reinsurance sector the big have been getting bigger.
No one can ignore the wave of consolidation, from the roll-up of small, independent retailer agents, wholesalers and MGAs, to the mega-carrier deals like AXA-XL and Ace-Chubb before it.
Even the biggest of the newest kids on the block – ILS managers – are wrapped up in consolidation.
But cyclical M&A is nothing new.
Remember the wave of M&A in the years leading up to the last true hard market, especially the desire of European giants to become global giants? Then remember the buried bodies that were uncovered in the years to come and the hard time many had getting rid of the stench?
The intermediary world is being transformed by consolidation and has witnessed a shift in many of the traditional links of the distribution chain.
But remember the power exerted by brokers and others to control distribution in the late 90s and early 2000s and how so much had to be unwound after the Spitzer bombshell? Remember heady multiples and subsequent integration issues that have afflicted some consolidators in past M&A cycles?
The significant growth in the ILS market over the past few years has also been transformative in the world of property (re)insurance. Where will alternative capital look to next at the frontier of risk and return, many have asked?
Remember too the complex packaging and trading of risk in a web of opaque dealings that created the LMX spiral and brought Lloyd’s to its knees?
We’re not yet pinpointing bad apples in the M&A basket, or suggesting that a Spitzer MKII is imminent, or that issues around collateral lock-up, counterparty relationships and transparency in the ILS market are just a smoking gun away from a scandal.
But a look to the past can be a useful reminder of the complacency and herd mentality that has set in before past market changes.
And remember the liability crisis in the mid-80s that in effect resulted in the birth of the Bermuda market?
Nobody is yet suggesting claims inflation in the US excess casualty insurance is close to creating that kind of broader capacity crunch.
But the impact of mushrooming jury awards and catastrophic events such as California wildfires or mass shootings is creating micro-crunches and questions about the insurability of some perils.
Could we be edging towards a real tipping point where the emergence of a longer-tail latency risk from the leftfield, or an exogenous shock to the balance sheets of insurers drives a dramatic shift in the economics of casualty underwriting?
Will thinning margins and the “death by a thousand cuts” of deteriorating attritional loss ratios together with AIG’s attempts at rehabilitation be enough to sustain underwriter resolve on pricing and bring a long, slow turn in the market?
Or will isolated pockets of hardening soon plateau as capacity rushes in to find better returns or to grab broader market share from AIG?
And we haven’t even touched on the topic du jour of Insurtech (where is the real substance versus the hot air?) the growing coverage gap, cyber and other emerging risks.
As the big have been getting bigger there have been plenty of examples of the (re)insurance industry’s ability to reinvent itself.
There are clearly still plenty of opportunities for nimble operators with good product.
As the big get bigger some clients and buyers seek alternatives, they look for the different view, a fresh set of eyes.
We frequently hear about brokers punching above their weight to take strong positions on the placement of large programmes from industry giants, or niche operators besting industry returns with underwriting and product innovation.
Remember the ebb and flow of market concentration and syndication over the years in the world of reinsurance panels, or the impact strategic changes in reinsurance buying from the likes of AIG can have on demand and pricing?
At The Insurer we can’t predict with any certainty what will happen.
But you can be sure that we will be there to provide insights and exclusive intelligence to our readers, punching above our weight as we do…