Partnership, not price is the real capacity

Arundo Re says partnership will define 1/1 renewals, and flexibility comes only with transparency and discipline.

Key points:
Data clarity unlocks capacity
Softening but structural discipline
Volatility pricing needs clear calibration

In a market buffeted by climate change, inflation and volatility, Arundo Re is doubling down on precision. “We price by exposure, not only by burning cost or experience rating,” said Deputy CEO Laurent Montador. The company’s approach is grounded in data, analytics and partnership; three tools Montador believes will define this renewal season.

“It’s very much about the value of partnership,” Montador told Baden-Baden Today. “Through a real partnership with clients, you can leverage reasonable softening and accompany them in the long term.”

“Clients are waiting for decreases and for softening,” he added, while insisting renewal discussions must move beyond price towards something more durable. In a market still managing last year’s oversupply of capacity, long-term alliances backed by transparency and discipline will matter more than price positioning.

Creating an environment of alliances and partnerships is very important.

“We’ll certainly work on the quotes we put forward, but getting the structure right matters most,” Montador said. He is clear that Arundo Re’s partnership model is not about fleeting negotiation but shared resilience. “We could be flexible with our partners, strong partners,” he noted, signalling a reward for clients who come prepared to engage on data quality, risk clarity and strategic alignment with an across the board philosophy.

Montador wants to avoid a repeat of what he calls “large aggregate cover multi-period with many unknowns that were not priced before”. The market, he says, must now price what is “insufficiently known”.

“On the primary rates, particularly around emerging risks such as cyber, they are decreasing, which is for so many unknowns,” he observed. This is where partnership becomes more than messaging. Montador wants to see ecosystems built between cedants, regional insurers, brokers and niche underwriters.

“Creating an environment of alliances and partnerships is very important,” he said, especially in what he describes as a more fragmented market landscape.

As 1/1 approaches, Montador acknowledged softening is both expected and, within limits, acceptable. “Single digit is possible, but clearly it is difficult to understand double digits,” he mentioned. Any significant reduction, he said, must be backed by “clarity in data and transparency”.

Appetite for share growth exists, but well adapted  where primary rate adequacy and underwriting discipline are evident. Climate change remains a major factor shaping pricing logic and Montador stressed secondary perils and correlation effects must not be underestimated.

Volatility, he warned, is not confined to lower layers. “One big event could change the perspective of the profitability of the market.” Arundo Re is pricing by exposure, not just by historic loss rating, and that is where modernisation and data strategy come in. “We are very data-driven,” Montador added. He wants address-level granularity, inflation-adjusted inputs and improved calibration across markets such as France and Germany where data maturity varies.

The company is also investing in AI and cloud infrastructure, not just for modelling but to change workflows and increase the efficiency of internal capacity allocation.

Despite all the talk of softer conditions, Montador pushes back on the idea of a broad market easing. “It’s not a broad softening as it may also be hardening in specific cases,” he said, citing casualty and political violence risks. He described a rising “atmosphere of unhappiness of the population” which increases SRCC sensitivity, particularly in European markets where state-backed schemes are being discussed.

For Arundo Re, the priority is capital strength and long-term positioning. “We are not seeking the top line for the top line,” Montador stated. Instead, bottom-line discipline and strategic continuity trump volume. He believes 2025 will be a profitable year but warned: “If the volatility absorption from reinsurance is overused, it will be at the benefit of volatility in the reinsurance premium.”

He urges the market to avoid an abrupt shift that restarts the cycle in damaging fashion. But his final message for brokers and cedants returning to Baden-Baden is optimistic: “We are open to discussions,” he said, but stressed that flexibility came with expectation that profitability has to be maintained on both sides.

Partnership, for Arundo Re, is not a slogan; it is a contract of mutual discipline, modernised insight and a willingness to engage for more than one renewal.

Laurent Montador is deputy chief executive officer of Arundo Re. He can be reached at: lmontador@arundore.com.

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