‘Cautious optimism’ for 2024, but market shifts await: Worldwide Broker Network

WBN CEO Olga Collins highlights the importance of getting the ‘creative juices flowing’ as she shares her market predictions for global re/insurance in the year ahead.

Worldwide Broker Network (WBN) chief executive officer Olga Collins is “cautiously optimistic” about the year ahead for the global re/insurance market after the challenging environment of the past few years.

Collins says that at the network’s global conference in Kuala Lumpur in October 2023, the sentiment among the delegates from five continents was “quite optimistic”. But she tells Intelligent Insurer she is more cautious in her outlook because there are so many uncertainties that can’t be planned for. From geopolitical risks and the climate change focus within the industry, to rising rates and natural catastrophe activity, there is a lot of uncertainty. But at the same time, the environment is a far cry from the chaos witnessed ahead of the 2022/23 renewal, she says.

“There are some positive signs as far as market stability goes and there are a lot more conversation around alternative solutions.”

It’s important to have those conversations with the client, says Collins.

“We talk about the role of the broker going forward. But being a consultant for the client, and asking: ‘Do you actually need to buy insurance?’ is important. Some clients have to take a look at their balance sheet and see what’s important to them.”

Of course, from the compliance perspective, there are many jurisdictions where you must buy insurance. But for everything else, you need to have a good consultative approach, she adds.

“We have a good spread of reinsurance and wholesale members within our network.” Olga Collins, Worldwide Broker Network.

Politically connected

Collins says that overall the re/insurance industry is very connected to the political scene. 

“A high percentage of countries are going through elections this year. With every single update, we know that the market can shift. Also, the looming recession has been in conversation for over two years now, but consumer trends are still quite unusual.”

These are all situations WBN’s members are watching closely.

“WBN has one-to-one relationships with many countries. In January, I spoke to our broker in Argentina—they’re thinking very positively about the next couple of months. They’re hoping the currency stabilises again and there will be a growth mode,” she adds.

Reflecting on the 2023/24 renewals, she agrees the negotiations were “more predictable” than the previous year’s, although there were still lines of business where it was difficult or more difficult to get capacity.

This particularly affected nat cat and cyber lines of business, as well as property without nat cat exposure, she says.

“Of course available capacity depends on the client profile and the spread of risk as well. But even those that are diversified from the property side, as soon as you start to touch Florida wind, the Caribbean, Mexico, hurricane and cyclone zones, I’ve seen risks being pulled out of the programme to get better pricing for the rest of the portfolio.

“That’s a phenomenon we’ve seen all along. I remember that from the client side—we used to have to get creative.”

She adds: “We have a good spread of reinsurance and wholesale members within our network, so access to different types of capacity is there.”

Collins says that WBN members have, over the last few years, gone into markets such as Dubai, Panama and Singapore for access limits. “You have to get the creative juices flowing.”

Technology and developments in artificial intelligence (AI), including generative AI, are another area “creating a lot of uncertainty for the market”, she says .

“When you start to talk about AI and the impact it has on our cyber products, we continue to have to be close to the markets to understand what direction cyber is going in and because of the uncertainty.”

Collins highlights the growth of alternative solutions for captives. These types of solutions have expanded from being just for large accounts to now being offered in mid markets as well.

This opportunity has developed because of the impact of hardening rates and the overall impact on the ability to place programmes for mid and upper mid-size clients.

“This is an opportunity for us as a network,” she says.

“We as brokers need to be very familiar with this and bring the solutions to the table for all sizes of clients now.”

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