{"id":6423,"date":"2024-01-18T08:32:33","date_gmt":"2024-01-18T08:32:33","guid":{"rendered":"httpss:\/\/www.advantagego.com\/?p=6423"},"modified":"2025-04-04T15:13:56","modified_gmt":"2025-04-04T15:13:56","slug":"new-podcast-with-senior-reinsurance-broking-executives","status":"publish","type":"post","link":"https:\/\/www.advantagego.com\/en-us\/content\/new-podcast-with-senior-reinsurance-broking-executives\/","title":{"rendered":"Calm after the storm \u2013 1\/1 mission accomplished?"},"content":{"rendered":"\n<iframe title=\"Ep194 1.1.2024 Renewals: It Feels Like The Time is Now\" allowtransparency=\"true\" height=\"150\" width=\"100%\" style=\"border: none; min-width: min(100%, 430px);height:150px;\" scrolling=\"no\" data-name=\"pb-iframe-player\" src=https:\/\/www.podbean.com\/player-v2\/?i=zdruf-1547249-pb&#038;from=pb6admin&#038;share=0&#038;download=1&#038;rtl=0&#038;fonts=Tahoma&#038;skin=3267a3&#038;font-color=&#038;logo_link=episode_page&#038;btn-skin=1b1b1b loading=\"lazy\"><\/iframe>\n\n\n\n<p><strong>The reinsurance world is in rude health, having made dramatic gains just over a year ago, maintained with a flat renewal at 1 January this year. Reinsurers could be expected to feel fairly pleased with themselves.<\/strong><\/p>\n\n\n\n<p>The latest Voice of Insurance podcast is a 1\/1 renewals special, bringing some clarity to the situation after the biggest date in the reinsurance diary, with an all-star-cast of three senior reinsurance broking figures joining host Mark Geoghegan for the episode.<\/p>\n\n\n\n<p>David Priebe, chairman of Guy Carpenter and James Vickers chairman of Gallagher Re International, are two of the longest-serving senior executives in the business, and David Flandro, head of industry analysis and strategic advisory at Howden Tiger is one of the sector\u2019s longest-tenured analysts.<\/p>\n\n\n\n<p>Flandro kicked off by calling this year\u2019s renewal \u201ca story of capital supply\u201d and an extraordinary turnaround of events to balance supply with the demand seen a year earlier. Capital fell 17% in 2022, and pricing for property cat went up 37% at the previous 1\/1, he noted.<\/p>\n\n\n\n<p>This has since \u201calmost totally recovered\u201d, with reinsurers starting to make much better returns on the assets side, and capital flowing in, particularly through a rebounding insurance linked securities market. All this capital has now come to match the heightened premium taken in by reinsurers at the past two 1\/1s renewals.<\/p>\n\n\n\n<p>David Priebe gave the figure of a 10% rise in dedicated reinsurance capital available this time around at 1\/1, after the scarcity and resulting high demand of a year earlier.<\/p>\n\n\n\n<p>Flandro said: \u201cGoing into the renewal supply and demand were relatively finely balanced. If you had that information three or four months ago, it was relatively easy to predict what was going to happen at this renewal.\u201d<\/p>\n\n\n\n<p>Understanding the capital supply issue is crucial in knowing what&#8217;s going to happen in reinsurance renewals, Flandro emphasised. What ensued was a \u201cfinely balanced renewal\u201d, driven as much as anything else by that delicate supply and demand balance.<\/p>\n\n\n\n<p>Aside from balanced or flat, orderliness is the other word being used in the broker analyses. Vickers picked up what was meant by this.<\/p>\n\n\n\n<p>\u201cWe&#8217;ve got to return to the more traditional approach of renewal,\u201d he said. \u201cReinsurers engaging early with brokers and clients, coming up with their quotations in a fairly prompt way, a reasonable negotiation around those quotes, firm orders being given, and following markets being prepared to follow in a fairly smooth basis. As a result, virtually all the renewals all completed in time, by the end of December.\u201d<\/p>\n\n\n\n<p>Differential terms, while some remain, have in many places been \u201csqueezed out\u201d, Vickers suggested. However, key to rebuilding strained relationships from the previous 1.1 has been easier \u201cexpectation management\u201d for brokers, with \u201ca lot less stress in the system\u201d, largely driven by a rally in the confidence of reinsurers, having already secured the radical reset of rates in 2023.<\/p>\n\n\n\n<p>This confidence in a sterling underwriting year in 2023 contributed to reinsurers\u2019 willingness to \u201clean in\u201d when making capacity available for a flattened price \u2013 roughly the same heightened price of a year prior.<\/p>\n\n\n\n<p>The insurers are bearing the burden of this increased return for reinsurers. The primary market\u2019s share of catastrophe loss burden was 10% larger in 2023. Demand remains strong, Flandro emphasised, although cedants will continue to struggle to get reinsurers to attach at lower points.<\/p>\n\n\n\n<p>However, there was one aspect to renewals, for which reinsurers did not get everything they wanted. Uncertainty about US casualty reinsurance was a concern going into 1\/1. This was caused by a deterioration in prior-year reserves, the effects of inflation and social inflation (i.e. compensation values assigned by US courts). Furthermore, many of those courts have a backlog of cases, due to the Covid shutdowns, further adding to reinsurers\u2019 jitters.<\/p>\n\n\n\n<p>Vickers suggested reinsurers might be overly nervous about casualty. Many cedants have decided to retain casualty risk on their books, projecting a picture of confidence relative to their more nervous reinsurers.<\/p>\n\n\n\n<p>\u201cA lot of the US primary carriers have got more confidence in their own [casualty] underwriting than the reinsurers have got\u2026Casualty is not the panacea that it was last year, but it&#8217;s not fair to say that it&#8217;s fallen completely out of favour \u2013 because it hasn&#8217;t,\u201d Vickers said.<\/p>\n\n\n\n<p>Priebe suggested there was \u201cample supply\u201d of casualty capacity.<\/p>\n\n\n\n<p>\u201cWhen market clearing prices were met, the critical thing that happened was everything was directed at individual company performance and portfolio experience. it became a very intense discussion that I call \u2018the dueling actuaries\u2019\u2026 We were able to deliver programmes at relatively expiring terms, so it wasn&#8217;t a massive reduction that people were talking about a Monte Carlo for casualty,\u201d he said.<\/p>\n\n\n\n<p>Flandro called casualty reinsurance underwriting \u201cmore discerning\u201d this time around, while noting the many different lines within this bucket, from D&amp;O to workers\u2019 comp, making generalisations of limited value.<\/p>\n\n\n\n<p>\u201cThe predictions that were made by some for casualty say at Monte Carlo in terms of large, double digit rate increases and big concessions on ceding commissions didn&#8217;t materialise, neither in the London market excess of loss, nor necessarily in the United States,\u201d he added.<\/p>\n\n\n\n<p><strong> <\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The reinsurance world is in rude health, having made dramatic gains just over a year ago, maintained with a flat renewal at 1 January this year. Reinsurers could be expected to feel fairly pleased with themselves. The latest Voice of Insurance podcast is a 1\/1 renewals special, bringing some clarity to the situation after the [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":6594,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ep_exclude_from_search":false,"footnotes":""},"categories":[19],"tags":[10,39,14],"line-of-business":[28,20],"class_list":["post-6423","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-podcasts","tag-exposure","tag-reinsurance","tag-underwriting-workbench","line-of-business-general-liability","line-of-business-property"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/posts\/6423","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/comments?post=6423"}],"version-history":[{"count":0,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/posts\/6423\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/media\/6594"}],"wp:attachment":[{"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/media?parent=6423"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/categories?post=6423"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/tags?post=6423"},{"taxonomy":"line-of-business","embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/line-of-business?post=6423"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}