Growth in spite of the gloom
Although the last 12 months have painted a very dark picture of the industry in some ways, through 2018 there has been some robust growth among re/insurance companies.
This is according to James Kent, global CEO of Willis Re, speaking at the Willis Re Press Conference at the Monte Carlo Rendez-Vous.
Speakers included James Kent, global CEO, Willis Re; Paddy Jago, global chairman, Willis Re; Mark Hvidsten, deputy chairman, Willis Re; James Vickers, chairman, Willis Re International; and Andrew Newman, president and global head of casualty, Willis Re.
“It is interesting, with all this darkness, that the revenue numbers are growing,” said Kent. “Many others are posting income growth are well.”
Willis Re is much more bullish and sees opportunities for growth for the industry as a whole going forward in 2019.
Kent noted that while hurricanes may have grabbed headlines, the market’s response to these events has been relatively calm.
“By April renewals it became clear the market was relatively subdued,” he said. “We have this view of a ‘new norm’ emerging for property-cat pricing.”
Willis Re also published its Reinsurance Market Report: Results for Half-Year 2018, which showed reported returns on equity returned to approximately 8.5 percent for H1 2018 after 1.4 percent for FY 2017. Capital remains steady despite the extreme 2017 loss activity, and also capacity oversupply remains, with insurance-linked securities (ILS) remaining robust.
The panel viewed the market as generally flat but functional, with pricing being dictated by account loss results.
“For what is viewed as a soft market, we do see it as functional,” Kent added.
Where there have been some pockets of underperformance in areas such as commercial auto or medical malpractice, there has been a wider pricing correction by reinsurers.
Hvidsten added that the hurricane losses were a real test for ILS, and it is generally an important time for this sector.
“People were pleasantly surprised at the reload that took place,” said Hvidsten. “There was angst about trapped capital, but it wasn’t an issue.”
The panel noted that growth in ILS continues, and ILS has become an enabler of the matching of risk to capital.
