Speaking to The Insurer, Lohbeck said that while the themes for the upcoming renewals are not necessarily different than anywhere else, some specialty lines of business are experiencing individual traits.
“In aviation, with the large Boeing and Ethiopian loss, we’re really seeing some further strengthening here as these losses start further unfolding and coming through so that’s been important,” she said.
“Then, on engineering, certainly on the more longer tail lines which have been impacted by the low yield environment we’re seeing that pushing rates upwards. We’ve seen secondary perils coming through on the nat cat side and then also across the industry a bit of prior year deterioration as well as some capacity withdrawals, so there are all these arrows pointing upwards,” she added.
Looking at credit and surety, Lohbeck said the increases they’re seeing here are in line with the industry looking to optimise on exposures.
But elsewhere across the portfolio, specifically in the marine space, there are several discussions around Covid-19 exclusions and international trade controls and also around affirmative cyber coverage and what’s coming through from the London Market.
“Last but not least, we have agriculture as part of the portfolio, where really the industry over the years has struggled to get to sustainable profitability levels so there again, together with the client, it’s really about improving original terms and just making sure that we can be in that space where we are needed,” Lohbeck said.
On the importance of data, digitization and automation in specialty lines and the wider industry, Lohbeck said: “We’ve just spent an awful lot of premium dollar on things that don’t cover claims and it doesn’t take a whole lot to figure out that we can’t stay in that space forever and everything that we can do around digitization, data and automation will help us to get to a level that’s a lot more sustainable.”
Indeed, specialty lines of business are widely considered as data rich areas, with Lohbeck citing the use of NASA data on weather, travel statistics in aviation and much improved planning data with regards to engineering.
“I could go on and on and I really feel that this is one of the must win battles for us as an industry, but certainly also for our teams at Swiss Re where a lot of our clients are looking towards us to help them change the way they do underwriting,” she said.
On Covid-19 and the impact the pandemic has had on the specialty space, Lohbeck said that globalisation has “peaked”.
“In fact, it already had peaked before Covid-19, but we’re now seeing that unfolding and changing a lot more rapidly than before and with that, we will see global supply chains restructuring in a really severe kind of way,” she said.
Referring to the recent Sigma report from Swiss Re, Lohbeck highlighted the group has projected an increase in global insurance premiums by something in the order of $60bn associated with supply chain transition.
“So, I think that’s definitely one of the key opportunities to seize as insurers, where we can help make that change happen,” she said.
But the impact of Covid-19 will be second to what the industry is seeing around climate change and sustainability and Lohbeck told The Insurer during a video interview, there had “already been some seismic shifts” around this.
“Covid feels like a big thing right now, but if you trust anything that’s being written by a lot of the scholars and the changes that we will see around climate change, [Covid] will be nothing compared to [climate change] so there is a lot more to come,” she said.
“With all of the new developments, new technologies and new processes that are coming there’s a lot to change around the way we assess risk, around the way we manage risk and around the way we transfer risk and that’s really right up our alley.
“For us, I think really [sustainability] is much more of an opportunity and there is no other option than being in the middle of it and so for me, investment is not only the right thing to do from a societal and from a human perspective, but it just also makes really good business sense,” she added.
Finally, on the war on talent, for Lohbeck this is a strategically important longer-term topic.
“For me, it’s really around how do we link into the talent that we need on the digital side. So, how do we recruit the next generation of underwriters that will help lead that transformation around digital and that will help lead that transformation around sustainability and how do we bring that all together.”
She concluded: “Underwriting, as we all know, is a pattern recognition game and it’s nothing that you learn in a year or two, so we need that experienced staff, we need that risk knowledge, but we also need to bring these people together with others who bring new kinds of skill sets that we need and can transform and shape our business for the future.”