17 October 2017Insurance

RAA highlights growth opportunities at PCI

Reinsurers will seek opportunities for growth in the current market as rates potentially harden, according to Frank Nutter, president of the Reinsurance Association of America (RAA).

“The primary interest of the reinsurance community is looking for growth opportunities. This could mean working with the PCI to find ways to transfer risks from government programmes into the private sector,” Nutter told PCI Today.

He added that the National Flood Insurance Program is a good example of this potential. Other government bodies that could have similar potential to do this include the Export-Import Bank of the US, the Overseas Private Investment Corporation, and Fanny Mae and Freddie Mac, which take secondary mortgage market risk (although the latter have increasingly been transferring risk to reinsurers in recent years).

“When we look at the purpose of advocacy groups such as the RAA and the PCI, one thing we can do is help provide the industry with opportunities to underwrite risks that perhaps government has taken on and is looking for ways to partner with the private sector,” said Nutter. “I’d highlight that as the top priority.”

According to Nutter, tax reform in the US is another big issue for the RAA.

“We, together with the PCI, will be working on the industry’s agenda related to tax reform, which will be another one of those things that should encourage economic activity that will benefit the insurance industry,” he said.

Nutter also stressed that 2017 will be an extraordinary year for catastrophes, with maybe $100 billion in insured losses from recent hurricanes just in the third quarter, coming on top of $22 billion of insured losses that occurred before the third quarter.

The industry can use this as an opportunity to demonstrate its worth to policymakers, he said. “For those of us who deal with government it’s really more about making sure that government doesn’t offer any restrictions about how the industry can adjust these claims and allow people to rebuild,” he said.

“In the past we’ve sometimes seen governments seeking to impose restrictions on the industry or the imposition of catastrophe bonds or similar. From my perspective it looks as though the industry is doing a good job of stepping up, paying claims and getting adjusters in.”

Get the latest re/insurance news sent to your inbox every day -  Sign up to our free email newsletters

Other stories from today's PCI newsletter

SCOR vows to take a nuanced view on rate rises, assessing clients on a case-by-case basis

Beazley seeks global rate hikes of 5 to 10% for renewals

Risk-based pricing is best way to manage the burden of flood losses

Insurtech firms become MGAs out of frustration

Alternative thinking: the historic rise of ILS

Cat losses demonstrate value and resilience of industry

ILS capacity demystified for US cedants

2017 insured losses could total $100 billion: RMS

Expert support for catastrophe and exposure management

Cedants: how much coverage to buy?

Insurers need to reach for the cloud

Firms grasp importance of data assets, yet don’t insure risk

Anticipate change and innovate: Sampson

Wildfires among the costliest on record

PCI unveils new officers to board of governors

Technology should mean evolution

$93bn premium forecast in US homeowners’ insurance

The bottom of the cycle has been reached

Sentiment is positive but headwinds challenge growth

Don't miss our insurtech email newsletter - sign up today

Already registered?

Login to your account

To request a FREE 2-week trial subscription, please signup.
NOTE - this can take up to 48hrs to be approved.

Two Weeks Free Trial

For multi-user price options, or to check if your company has an existing subscription that we can add you to for FREE, please email Elliot Field at efield@newtonmedia.co.uk or Adrian Tapping at atapping@newtonmedia.co.uk


More on this story

News
25 September 2017   Trade bodies and re/insurers have welcomed the news that the EU and the US have signed a bilateral agreement on insurance and reinsurance after more than 20 years of discussions and a year of formal negotiations.
Insurance
27 June 2017   The Reinsurance Association of America (RAA) is lobbying for a lower corporate tax rate in the US while ensuring that any changes to proration of tax exempt interest or discounting of loss reserves appropriately reflect the business of insurance, according to a June 26 press release.