Talking to The ReInsurer, Chandler said he and his colleagues do expect pressure on casualty quota share ceding commissions from reinsurers, but said clients’ use and understanding of data will play a key role in fighting back against such moves.
Reinsurance buyers that are able to provide a greater depth and better understanding of their data compared with their peers will benefit when it comes to negotiating terms, said Chandler.
“[Clients that] can point to the underwriting acumen and the changes that have been made in their policy forms and their pricing paradigms will continue to generate a ceding commission on quota shares with a 3 in front of it,” said Chandler.
“Certainly the BMS brokers will be pushing hard for continued ceding commissions north of 30,” Chandler added.
As the executive explained, “it’s not just one size fits all when it comes to quota shares”.
BMS Re is supporting clients to make sure they have the ammunition they need in the form of data to empirically prove that they are the best in class, or better than their peer group, when entering into conversations with reinsurers, he added.
On the broader reinsurance renewals, Chandler said there is “no doubt” that the Covid-19 pandemic will permeate discussions.
“It really is going to be a very different renewal season from what we’ve seen in the past, just with the confluence of different events, both Mother Nature-driven as well as economic,” he said.
“This global pandemic is akin to a cat 5 hurricane striking the entire world for the last five, coming on six, months now, so it’s just going to be a different narrative to what we’ve experienced before ever in our careers.”