Speaking to this publication as part of #ReinsuranceMonth, the executive said: “Philosophically I think reinsurers’ job is to help their clients with volatility. That’s sort of a core premise. So as reinsurers start to move away from volatility I feel like they’re not the true partner with their original client.”
Fox said the trend was by no means universal, but there had been a growing number of recent examples.
As a reinsurance broker he said that his firm’s job is to create solutions for first layers that are coming under increasing pressure as capacity retreats.
“But I think it’s an opportunity for reinsurers to reinvigorate their partnership and help their client solve volatility and by solving volatility they get a better return over time.
“A core message of ours to reinsurers is help solve volatility – you’ll get paid for that – but don’t run away from it because we can’t all be perfect every single year and there’s going to be volatility in this business,” Fox continued.
In the same interview, the executive also highlighted the surge in fronting carriers as vehicles for reinsurers to access program business.
As well as a reinsurance broking career at firms including Benfield, Fox ran program carrier Clarendon for a period as it eventually became Praetorian and was sold by Hannover Re to QBE in 2006.
“It’s amazing to see the activity in the MGA space and the insurtech space, which also leads to the growth in the fronting space. It’s a phenomenon we’ll have for a while – I don’t think it’s cyclical, it’s secular and you’ll continue to see new forms of distribution.
“And we’re disaggregating the capital for the most part from the underwriting distribution engine. So I think there’s a need for even more fronting capability,” he commented.
He added that with pricing and terms typically better in insurance than reinsurance, reinsurers are trying to get access to more original business through fronting and distribution partnerships.