MS Re’s Goldie: “Real anger” at last 1.1 will overshadow Monte Carlo discussions next week
MS Reinsurance chief underwriting officer Charles Goldie says the stage is set for “difficult conversations” at next week’s Monte Carlo Rendez-Vouz, with the executive pointing to “real anger” amongst cedants over the uncompromising stance taken by some reinsurers in the run-up to 1 January 2023.
Speaking at The Insurer’s Pre-Monte Carlo Forum this morning in London, Goldie spoke of the well-documented mayhem at 1 January 2023 around the renewal of cat/all-risk treaties and drew a distinction between what he deemed “transactional players” and “relationship players”.
Goldie – who joined MS Re in 2020 following a 16-year tenure at Bermudian PartnerRe – acknowledged that while both approaches are necessary to maintain a functioning reinsurance market, moves taken by certain reinsurers to cast aside relationships in favour of a tougher stance on renewals left a bitter taste for some buyers.
“There was a real emotional reaction to the hard market and that had nothing to do with economics. Buyers understand that in business you have to make money – what they hated was the ‘how’,” Goldie explained.
“What a lot of buyers really were upset with was when their relationship [reinsurance] players suddenly started being transactional players. These reinsurers had been telling buyers for years: ‘We're with you, we're a part of your strategy and we want to work broadly with you.’ And then they held their quote until 29 December.”
Goldie predicted this dynamic will lead to a “panel change” over time and will come up next week during the global reinsurance industry’s most important gathering.
“Buyers remember who they're talking to, who they're working with, and who's actually going to be part of their business over the longer haul,” he said.
Those will be some of the most difficult conversations for reinsurers in Monte Carlo this year,” he continued.
This feeling was echoed by Howden Tiger’s Elliot Richardson, who stressed the need for brokers to remove friction by managing client expectations properly.
“Brokers need to make sure they manage expectations correctly. That was a real failure of our system last year,” he said.
“We need to make sure we’re having those hard conversations but equally to push and be an advocate to the markets.”
Richardson added: “I believe the general situation has calmed down. Last year there was a lot of emotion that ran into it and this year we have already had a much more orderly renewal at 1.6 – it is clear that capital is available at a price. We’ll need to manage that and that's where we can’t dodge the difficult conversations.”
Goldie and Richardson were speaking at this year’s Pre-Monte Carlo Forum alongside Leadenhall Capital Partners’ Luca Albertini, Bryan Cave Leighton Paisner’s Jonathan Sacher and Insurance Advisory Partners’ Tony Ursano. It took place in front of an audience of over 300 at WTW’s Lime Street auditorium.
Look out for further coverage and analysis from today’s event later today and in The Insurer’s Monte Carlo event coverage next week…