Swiss Re will re-engage with P&C lines if prices firm; high-frequency secondary perils remain anathema

Swiss Re will be ready to pump new money into select lines of its P&C reinsurance business if the price looks right, but with strong warning that the price bar is set high for the high-frequency secondary perils it has worked recent quarters to shed, CFO John Dacey told investors.

“We expect pricing to be rational and if pricing is rational, we see an opportunity to write a bigger business and look forward to that opportunity,” Dacey said. “But we don’t rule out that it goes otherwise.”

Prices could be buoyed in the reinsurance market if rivals who are more dependent on the retro market continue, he suggested. Pressure on the retro market “may constrain some people who rely less on their balance sheet less than us to grow new business,” Dacey said.

Visibility is not high. “We just have to see where January 1 and subsequent renewals land us,” Dacey said when questioned on the 2022 outlook.

Growth and new money are not so very likely on the high-frequency secondary perils that Swiss Re has gained a name for decrying. Swiss Re will “continue to abstain,” CUO Thierry Leger added.

Asked what types of price action would be required in those segments to re-engage Swiss Re, Leger offered few doubts. “Very, very high,” Thierry said, hinted at cases requiring more than a doubling of rate. Many “will probably remain uninsurable still in our view.”

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