The bottom of the cycle has been reached
Sompo International remains strongly positioned in the market, despite the losses from natural catastrophes that have hit in the third quarter of the year, David Bigley, executive vice president, chief underwriting officer and head of global catastrophe reinsurance at the company, told PCI Today.
“We’re well positioned with a strong balance sheet,” said Bigley. “We’re expecting some differentiation in the loss experience of our clients and some changes in the marketplace before the 1/1 renewal season. We had reached the bottom part of the cycle,” he said.
Bigley added that he thought the recent string of natural disasters in the forms of hurricanes Harvey, Irma and Maris, along with the Mexican earthquake and the ongoing wildfires in California, will be enough to turn the market after its prolonged bout of softness.
He added that the nature of the rate changes would be determined by the overall impact of the losses, saying that information as to the exact losses was still developing as companies assess the damage. Any eventual rate changes would also rely on the individual relationships within the market.
He also stressed that the market was seeing a return to discipline after what had been a long period of rate softening, which he welcomed.
According to Bigley, the forthcoming rate increases will not be confined to property business, but would be more broadly applied than that. The California wildfires were being watched carefully. Some early estimates have suggested losses could be at least $2 to $5 billion.
He also stated that the year had seen some extraordinary weather events, pointing to the landfall of what had been Hurricane Ophelia on the southwest coast of Ireland as being a good example of that.
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