As the Scottish poet Robbie Burns famously said, “The best laid schemes o’ mice an’ men / Gang aft a-gley.” Which, in modern parlance, means despite our best intentions, plans often go awry. Nowhere so was this more aptly demonstrated than at this year’s reinsurance meeting in the scenic German spa town of Baden Baden.
The main theme of the Guy Carpenter Reinsurance Symposium this year – a traditional highlight of the meeting – was intended to be the so-called fourth industrial revolution, namely the sophistication and proliferation of digital technology and its projected impact on the (re)insurance market, across both intermediaries and carriers. And while there can be little doubt that Baden Baden in 2019 was right to address the issue of Insurtech head on given its increasing importance, as so often happens in life, events elsewhere distracted attention.
Famously this year, we had the Greenpeace burning hut, a direct protest against climate change and the way in which reinsurers are perceived by some to be part of the problem, both through their investments in energy companies that explore and exploit fossil fuels; as well as through those reinsurers that directly underwrite so-called ‘dirty energy’ projects such as coal mining and offshore oil exploration.
Already, a number of carriers have made explicit their intention to retrench from this space- it remains to be seen whether such public protests against reinsurers will have the desired affect that Greenpeace and similar climate change protestors want, or whether it will only serve to strengthen their resolve to be able to continue to underwrite difficult risks.
As with Monte Carlo the previous month, so too the seasonal threat of windstorm was also very much on the mind of attendees at Baden Baden this year, with Typhoon Hagibis hitting Japan hard and looking like being a substantial multi-billion hit to the market, with the reinsurance programmes of the domestic Japanese insurers almost certain to be be impacted. Following closely on the heels of Typhoon Faxai and Hurricane Dorian, the consensus at Baden was that such events will serve to maintain the hardening rating momentum which has taken place during the course of 2019 and is expected to continue as we approach the all important 1.1 renewals.