Re/insurance is keeping pace with economic changes: Antares

The reinsurance industry is adapting well to the changing shape of the global economy, said Richard Anson, head of ceded reinsurance at Antares.

His words contrasted sharply with those of others who have emphasised the need for radical change in the reinsurance industry.

In recent years there have been dizzying changes in the structure of the global economy, in which the largest accommodation business in the world does not own any hotels, and the largest taxi company does not own any cars. This has profound implications for the insurance and reinsurance industries.

Anson said: “If a driver needs personal insurance during the week, but on the weekends is making some additional income as an Uber driver, innovative new insurance cover can reflect that.

“But some reinsurers may specialise in covering taxis, so the personal coverage component might move away from its appetite.”

The problem is even more complicated in the hotel market, with the rise of Airbnb, he noted.

“Where does the household policy stop and the hotel policy begin?” he asked.
But, he argued, insurers and reinsurers are doing a good job keeping pace with such changes in technology and the economy.

“If there is a demand for a product, the insurance industry is pretty good at providing it,” he said. As long as the terms of the policy are clear and explicit, insurers will continue to find the coverage they need in the reinsurance market, he said.

Anson welcomed the progress the industry has made adapting to the increasing challenge of cyber, which is now recognised as an explicit risk.

Antares is looking at buying a cyber programme next year, he said.
“If cyber is explicitly covered in a policy we need to cover it. A marine policy might be 95 percent marine risk and 5 percent cyber risk. But the marine reinsurer may not want to cover the cyber risk, so we may need a shadow cyber programme to cover that element of the risk,” he explained.

Anson noted the growing number of institutions pulling out of marine business, which is dramatically reducing demand in the market. This should be driving down prices, but instead it is counterbalancing the overall trend of rising prices, leaving costs essentially flat, he said.