The reinsurance market is at an “inflection point”, leaving it incumbent on reinsurers to spearhead change for the benefit of all stakeholders, Scor CEO Laurent Rousseau told delegates at this year’s Rendez-Vous.
Describing the current environment as “one of the best markets we have seen for years”, Rousseau outlined that the three main headwinds posing systemic risks – climate change, pandemic and inflation – also present opportunities for the industry.
“These are in the form of reinsurance supply and demand dynamics, secular long-term trends around technologies and sustainability, and evolving accounting and solvency regimes, respectively,” he said.
Rousseau drew comparisons between the reinsurance market of today and the insurance market of 2017, characterising both as “unloved industries” – and yet, he highlighted, as society transitions from abundant financial, natural and human capital resources towards scarcity, reinsurance has never been more important.
Therefore, Rousseau said, it is crucial to take advantage of the market environment and seize opportunities to deliver sustainable performance.
The key to determining a strong, sustainable performance begins with good underwriting and capital allocation, he added.
Also speaking at the Rendez-Vous, Jean-Paul Conoscente, CEO of Scor P&C, noted that the industry is entering the 2023 renewals in a bullish market.
With a hardening reinsurance market and tightened terms and conditions, pricing adequacy will be key, as well as restructuring or reallocating some programs, Conoscente said.
From a capital management perspective, fungibility of capital means that the industry must mobilise greater capital pools and incentivise greater risk sharing to enable a long-term prevention mindset, added Rousseau.