Obsession with new capital means firms miss other risks

Re/insurers have been blindsided by the influx of alternative capital, neglecting other considerations such as global regulatory change and the uncertainty it brings, Mo Tooker, president of Berkshire Hathaway’s Gen Re, told PCI Today.

Despite the fact that the industry is currently battling many noteworthy challenges, he said, some of these are being forgotten as talk of alternative capital continues to take centre stage.

“The influx of supply in to the natural catastrophe space has been getting most of the headlines but there are other significant trends that deserve more discussion,” he said. “For example, the pace of regulatory change across the globe and the uncertainty around the ultimate destination
for that change will have a dramatic impact on the future reinsurance market landscape.”

Tooker also said that he wanted to see more discussions about technology.

“Other topics such as the intersection of advances in technology with just about every part of our society, including access to information and transportation, should also be discussed. These advances in technology will be transformational,” he said.

Speaking of the PCI conference, Tooker described the season as a whole as “noisy” with industry participants jockeying for their message
to be heard above the din. However, for Gen Re, he said that the reinsurer will avoid making general market prognostications, letting its customer-focused activities speak for themselves.

“We’re here to talk about the issues and challenges specific to each of our customers,” he said. “The primary pricing environment is growing more demanding and we will be working with customers to help them successfully compete in the current environment.”

Tooker added that the company will continue to focus heavily on its underwriting capabilities, relying on the “human” element over models alone.

“We continue to invest in underwriting, risk management and claims solutions for our customers. One of the areas we are most excited about is our work around the human element in underwriting.

“We believe that the qualitative judgement we apply to the sophisticated quantitative models we use is an area that deserves significantly more attention.

“We are working with our customers to help them understand the pitfalls of not focusing on both the quantitative and the human element,” he said.