Speaking to The Insurer, Lohbeck said projects such as the European Union’s “green deal” – a bloc-wide initiative designed to stimulate economic growth across the continent, tackle climate change and combat rising inequality – represent a “clear opportunity” for specialty lines carriers.
Lohbeck, who also pointed to US president Joe Biden’s bipartisan $1trn public works bill as an opportunity for carriers, said such projects require input from almost all specialty markets, ranging from engineering through to marine and credit & surety lines, as governments look for support as they make improvements to national infrastructure.
Such projects would help to counter the negative impact of recent loss activity, particularly across marine lines, which Lohbeck said have been hit hard by incidents such as Golden Ray and more recently, the oil spill off of the coast of California.
“What’s maybe less visible but is also important is that we have seen certain marine classes really continuing to see attritional losses that are eroding profit margins,” Lohbeck added. “Clearly it’s very much an evolving risk landscape.”
The executive also noted concern over potential aggregation issues within marine exposures due to ships being stuck in ports. “Definitely aggregations are a topic for us,” she said.
Lohbeck said this issue is becoming more important with the increasing size of container vessels, up almost tenfold from the 1970s.
“We are also starting to have much more of an aggregation topic on board of a single vessel,” she continued.
Lohbeck said that an up-tick in ransomware attacks on supply chains has also added “an additional dimension into the mix”.
Commenting on credit and surety lines, Lohbeck said that the phasing out of government support measures, put in place to limit insolvencies during the Covid-19 pandemic, so far hasn’t resulted in a significant uptick of insolvencies.
However, she said: “We do think that that will happen and at some point in time there will be a return to normalised levels.”
Turning to the rating environment and the potential for rate improvements at the upcoming renewals, Lohbeck said Swiss Re sees “heterogenous price trends” across engineering, marine and credit & surety lines, but with “a very clear upwards tendency” depending on class and market losses.
“Overall we do expect rate increases for specialty lines, and at Swiss Re we really want to stay disciplined and focus foremost on portfolio quality and on margins,” Lohbeck said.