Rates are increasing and clients need support in times of change: PartnerRe

Rates increases are now “very wide scale” across the industry but not necessarily completely across the board—yet. What is clear is that in a time of extraordinary change and uncertainty, pricing must reach a level that is sustainable, and clients need the support of their reinsurers.

That summarises the thoughts of Jon Colello, chief executive of P&C Americas for PartnerRe and president of Partner Reinsurance Company of the US. He told APCIA Today that on the property and casualty sides of the business a number of pressures were resulting in rate increases.

“On the property side, the frequency of large nat cat events is increasing. The market has now experienced a third year in a row with two major hurricanes or more; this is being exacerbated by problems including loss creep, trapped capital and high retro prices,” he said.

“On the casualty side, loss cost inflation continues to increase, a number of lines are under pressure—and that is on the back of some 10 years of softening rates. This all comes amid other disruptive pressures including continued low interest rates, insurtech and alternative capital.”

Colello said he sees PartnerRe’s role in this time of change as supporting its clients and removing the uncertainty. He highlighted the company’s value propositions—while each competent part is not unique, when combined, they set the reinsurer apart in the market.

This proposition includes the company’s large balance sheet with more than $9 billion of capital and an ‘A+’ rating; its long-term private ownership, allowing it a longer-term perspective; and the fact that it writes reinsurance only.

“That last part is important to clients; we do not compete with them,” he said.

Colello joined PartnerRe from AXIS Re in April, where he had been responsible for all underwriting platforms in Bermuda, Canada and the US. He said the unique value proposition of PartnerRe is partly what attracted him to the company.

He sees his role now as one of simply implementing the company’s existing strategy.

“Our clients are operating in an uncertain environment and it is about executing effectively and helping them mitigate uncertainty,” he said. “We want to grow alongside our core customers.”