Guy Carp: casualty market strong across all lines

There is ample capacity in the casualty market and the traditional market is very strong across all lines, according to Nick Frankland, chief executive officer of EMEA operations at Guy Carpenter.

Speaking at the broker’s annual renewals discussion, Frankland said that appetite was growing as reinsurers look to diversify and further cement relationships.

“As we know, the casualty market has not been beset by large losses and there is ample capacity in the market. Traditional capacity remains strong in all areas and appetite is, if anything, increasing as reinsurers look to maximise both relationships with clients and class diversification,” he said.

In terms of buying strategies in the sector, he said that the trend has been to combine programmes – putting all casualty lines, such as liability, motor and personal accident, into the same coverage.

“Buyers are trying to block longer tail coverages together to achieve economies of scale, broadening of coverage and to maximise overall value,” he said. “Traditional reinsurers that are trying to retain revenue growth are more concerned about protecting their business on the longer lines where new entrants don't play.”

Speaking directly about the motor sector, Frankland described it as “an interesting space”, saying that the European motor sector was a place to watch.

“At one point it looked like the entire motor market would go completely capitalised, and that only a few would write on a non-capitalised basis,” he said. “We thought that might have had some impact, but traditional markets still writing on a non-capitalised basis showed more appetite and wrote more.

“It looked like a restriction, but it has been mitigated by circumstance.”