25 October 2017 Insurance

Losses may signal end of soft market

The major losses from hurricanes Harvey, Irma and Maria and the Mexican earthquakes will not only impact the results of insurers and reinsurers for this year, but highlight other non-cat lines of business that have been underperforming or that are price-challenged.

This is according to David Bigley, executive vice president, chief underwriting officer and head of global catastrophe reinsurance at Sompo International, who suggested that the underwriting results coupled with smaller reserves releases and a low interest rate environment will help to push the market into firmer territory.

Since 2011, global rates on line are off 30 to 40 percent and more in some places, according to Bigley.

“The baseline is much lower and I foresee a broader, global rate change,” he added.

While the market is changing and rates should increase, Bigley stressed that it should not change Sompo’s commitment to its clients.

“At Sompo International we expect market correction. It doesn’t mean the end of relationships, however. Relationships will matter in this marketplace, but it will be changing.”

Bigley also expects a significant increase in retrocession price year on year, driven further by the catastrophic losses.

He continued: “The question is how dependent are reinsurers on their retro? Can they execute their strategies in the same way if retro pricing goes up 25 to 35 percent, as the market is suggesting?

“At Sompo International we would say we are well positioned. We have experienced underwriters in all lines of business that we write to work through the market changes with our clients,” Bigley concluded.

Get the latest re/insurance news sent to your inbox every day -  Sign up to our free email newsletters

Other stories from the Baden-Baden Day Three newsletter

HIM losses will be capital event for some syndicates but Lloyd’s steady on cat

Scale of Q3 cat losses could be the biggest ever insured cat event

Russia’s national reinsurer makes its mark in year one

Cat losses and the role of local knowledge

RPA more disruptive in re/insurance than ‘useless’ blockchain

Volatility drives demand for quota shares

Global post-loss rate hikes expected

2017 nat cats show value of objective event data

Cat bonds key to closing protection gap

Know your exposures before you talk price

Nat cat losses are an opportunity to prove resilience

Growth of cyber offerings a hot topic

Qatar Re to cash in on US rate recovery

German motor market needs readjusting

Recent cat losses could make ILS collateral more attractive

Soft market still a concern for renewals

Reinsurers must protect their margins

Disposal of legacy business can increase efficiency

Rate hikes unlikely: Caribbean cat facility

P&C execs bullish on pricing following record cat losses

E+S Rück forecasts growth in Germany

London Market launches campaign to tell its story

Cyber risk modelling gets an upgrade

Regulations pose challenges for insurtech innovation

Don't miss our insurtech email newsletter - sign up today

Already registered?

Login to your account

To request a FREE 2-week trial subscription, please signup.
NOTE - this can take up to 48hrs to be approved.

Two Weeks Free Trial

For multi-user price options, or to check if your company has an existing subscription that we can add you to for FREE, please email Elliot Field at efield@newtonmedia.co.uk or Adrian Tapping at atapping@newtonmedia.co.uk