Hiscox Re sees slowdown in rate reductions

The softening of the market is slowing with some renewals likely to be flat this year, Andrew Dolphin, head of international and agriculture at Hiscox Re, told Baden-Baden Today.

“Baden-Baden, from our standpoint, is quite interesting,” Dolphin, said. “More than half of the meetings we have are completely off-cycle, in terms of meeting clients whose renewals aren’t at January 1.

“Of the meetings we have had with those whose renewals are at January 1, it would seem to be a particularly stable renewal period, with a reasonable slowdown in rate reductions, and we’ve also got a couple of flat renewals.

“There are no major underlying threads. There’s been a lot of talk about terms and conditions over the past year, but it feels as though a lot of that movement has happened now. A lot of the contracts that we’re seeing throughout the year are actually very straightforward in terms of renewal.”

Hiscox Re sees around 50 percent of its renewals at January 1, according to David Roache, vice president, underwriting at Hiscox Re.

“The other big renewal season would be April 1 with the Japanese business and then June 1 and July 1 with some of the US business, but January 1 is definitely the most important. Those renewals are just starting to come in now—we’re at the bottom and we should soon be ramping right up,” Roache said.

For Hiscox Re the income split from these renewals is fairly spread, Dolphin said, with January 1 representing about 40 percent of the company’s income. As a consequence, the company views all the renewals as important. However, he added, he sees more deal flow at January 1 in terms of submissions.

“We did hear that there was a temporary hard market in the retro space at July 1,” Roache said. “A lot of the third party capital was tied up in the January 1 renewals, and when people went to buy up more capacity, especially in Florida at July 1, a lot of that capacity wasn’t there, so that resulted in positive risk-adjusted prices.”