It’s been another week of interviews with industry leaders at The ReInsurer as we tap into the important topics and events that are shaping the market in the run up to the 1.1 renewals.
This week we caught up with Beach’s Jeff Turner who said Canadian insurers can expect to face a “rational” reinsurance renewal heading into 2021.
Turner, who is senior actuary and managing director of reinsurance broker Beach’s Canada office, noted that low interest rates will put a focus on underwriting profitability, while the attractiveness of potential reinsurance returns elsewhere may impact the amount of capital at play in the Canadian market.
Canadian insurers should be assessed on their own merits as the country has not been impacted to the same degree by some of the recent industry trends, he said.
Also speaking to this publication, Ed Broking’s chairman of non-marine reinsurance Ian Wicks urged brokers to embrace technology in order to take cost out of the system.
He pointed to the use of electronic trading platforms as “essential tools” that not only strip out inefficiencies but also enable business to be done faster.
Wicks added that brokers will increasingly rely on data and technology as the focus turns to being a “holistic” strategic advisor.
Keeping with the technology theme, Igor Best-Devereux, the founder and CEO of eReinsure, says the writing is on the wall for those companies that do not embrace technology.
For those that adopt technology, the dividends can be huge but those who fail to keep up may be left behind, he said.
“There will inevitably be winners and losers, particularly losers who are not tech-savvy. The writing is on the wall as far as this is concerned,” he said.
Aon’s head of catastrophe insight Steve Bowen warned that annual doubledigit billion-dollar losses from the US severe convective storm (SCS) are now a “new normal” for the industry.
Wildfires, floods and droughts are all causing larger losses than in the past, but Bowen said SCS is the most notable example of a secondary peril taking a heightened toll on the industry.
Bowen said the frequency of such events is not on the rise but the severity of each event is increasing.
Beach president Clark Hontz said rated reinsurers have an opportunity the likes of which has not been seen in years asclients turn away from the collateralized market over trapped capital and commutation concerns.
Hontz explained that he has not seen clients “flock” to rated reinsurers. Elsewhere, Hontz said there has been an increase in interest for industry loss warranties (ILWs), with more reinsurers purchasing the specialist protection this year.
Meanwhile, Volante Global’s Talbir Bains opined that improving conditions combined with the challenges born out of the Covid-19 pandemic have created significant opportunity for underwriters.
He warned that a long-term view and a renewed focus on discipline will be required if those opportunities are to yield positive results.
“The opportunities are multiple but the key is discipline,” he explained. “What we have to do as a market is look at the long-term viability of those opportunities and not the short-term gain.”
We also spoke with Swiss Re’s Nicola Parton who highlighted that any positive changes in social inflation trends driven by the pandemic were only “temporary” and that a sustained period of rate increases is required if prices are to compensate for loss trends.
“We don’t see any signs or any evidence that the trends around social inflation are improving,” she said.