The industry is pressed to find new solutions but it has the talent to achieve them: BMS Re CEO
Inflation is not going to go away, so the issue facing the re/insurance industry is how to contain it. That is the view of Pete Chandler, president and chief executive officer of BMS Re. Factor in climate change, and the industry is pressed to find new solutions—but Chandler believes it has the talent to achieve these.
“Inflation has always been here—medical and social inflation as well—I don’t think they ever went away,” he said. “A very popular term was used a year ago—that inflation was going to be transitory. It’s permanent: wages are increasing, real estate values are increasing, the cost of goods sold is increasing.
“In the US, they strive to keep inflation at around 2 percent, and now it’s running north of 8 or 9 percent. The question is, can we temper it, can we contain it, and can society contain it?”
BMS Re’s focus is on the middle market, regional, mutual, and specialty reinsurance space. Chandler said conversations at Monte Carlo have revolved around inflation and also property-cat capacity, inflation, climate change, and new capital coming into the marketplace.
“Conversations are about what everybody is going to do come January 1, because it’s going to be a challenge,” he said. “It’s going to be different from the past. We expect the demand for capacity to exceed the supply of traditional reinsurance, so we’re talking a lot more about structured covers, ILWs, cat bonds, ILS capacity.
“That’s our job as brokers: we will leave no stone unturned in trying to find efficient capital for our clients and our prospects.”
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