Casualty lines, geopolitical risks and rising cat losses should all concern industry: Howden

Growing challenges in casualty lines, emerging geopolitical risks and rising natural catastrophe losses in Europe are three of the main concerns identified by Howden in a report titled “Beyond the horizon: shaping the future of risk”, published on September 5, which underscores the imperative for industry collaboration in developing innovative solutions in response to rapidly changing landscapes. 

“The landscape of risk is changing at an unprecedented pace, and so too must our industry evolve alongside it,” said Massimo Reina, chief executive officer, Howden Re, International. “We are committed to championing the development of innovative solutions and believe that collaboration across the industry is essential.”

Commenting on casualty business, the report flagged several challenges particularly in relation to growing liabilities associated with persistent pollutants such as per- and polyfluoroalkyl substances (PFAs), and the evolving risks in the motor market driven by the adoption of autonomous vehicles.

In terms of geopolitical risks, the report identifies a broader array of risks, including the rise in strike, riot and civil commotion (SRCC) events, as well as political violence (PV). These threats are becoming more frequent and severe, and although a global issue, the risks are particularly heightened in regions with increased political instability. 

“Bespoke solutions are needed.” David Flandro

Finally, the report highlighted the rising natural catastrophe losses in Europe. Recent European flood events and severe hailstorms in Italy have significantly impacted insured losses, driven by shifting climate patterns and increasing exposure in vulnerable regions.

David Flandro, head of Industry Analysis and Strategic Advisory at Howden Re, underscored the urgency of addressing these challenges, saying: “The risks we are encountering today are more interconnected and severe than ever before, requiring new ways of approaching risk management. 

“Bespoke solutions are needed, tailored to the unique challenges faced by different regions and lines of business worldwide.”

The report suggested that the future of the re/insurance market will be characterised by a greater emphasis on resilience, adaptability, and innovation. It provides detailed proposals for new solutions tailored to specific risks, such as enhanced reinsurance structures for European flood and hail events, innovative parametric products for SRCC and PV exposures, and advanced liability management strategies in the casualty sector. 

Reina concluded: “At Howden Re, we believe that the future of risk management lies in our ability to innovate and collaborate. We are dedicated to working with our partners to ensure that the re/insurance industry not only survives but thrives in this new era.”

For more news from the Rendez-Vous de Septembre (RVS) click here.

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