A different dynamic for renewals
Some markets are looking to write less business from Latin America and to increase their activities elsewhere, a dynamic not seen in any other region.
This is according to David Battman, head of international at BMS, and Jose Astorqui, CEO of BMS Latin America.
“At present, Central America and Caribbean renewals—particularly for treaty—are certain to attract greater scrutiny from reinsurers and retro markets, following hurricanes Harvey, Irma and Maria, and the Mexico City earthquake,” explained Battman.
Astorqui added that the 31 December treaty renewal season is going to be of great importance for the performance of the industry as a whole in 2018.
The main change in 2017 versus 2016 will actually be felt in 2018, with a hardening of rates in territories affected by ongoing major wind and quake events.
“The industry needs to ensure an efficient and pragmatic response to widespread claims, as clients will remember each insurer and broker’s performance at this time,” said Astorqui.
Another trend in the region is that of commodity prices trending upwards.
According to Battman, this will be reflected in the re/insurance required by mining companies and other exploration and production firms.
Because of this, Astorqui expects greater growth in products linked to the mining and energy sectors, as well as in general aviation, surety and affinity.
“Are we witnessing the end of the soft market? We will see, but BMS is ready,” concluded Battman.
BMS is newly focusing on Argentina, Paraguay, Colombia and Peru, as well as growing its core business in Mexico, Central America and the Caribbean, and Brazil.
Developments in Venezuela are being watched closely by BMS, although the firm still helping Venezuelan clients to secure reinsurance cover.
“We are less optimistic about the short-term performance of the general liability line in the region, due to depressed rates and overcapacity,” Astorqui explained.
Since mid-2016, the strategy has been to deepen and widen its offering to clients, by moving into the treaty reinsurance space, and also by increasing the number of products it deploys in facultative and treaty.
BMS LatAm is about to close its second full year of operation, with a 45 percent growth rate.
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