Re strategies for a hard market

The extent to which improved market conditions for reinsurers will endure and the importance of maintaining continued discipline were the main talking points at the annual  Bermuda:Re+ILS roundtable held at the Monte Carlo Rendez-Vous on September 11, sponsored by  Aspen.

Titled “Reinsurance Strategies in a Hard Market” and moderated by Bermuda:Re+ILS editor Bill Zuill, the event hosted 13 attendees from carriers, brokers and service providers who grappled with the biggest talking points of the Rendez-Vous—as well as debating Bermuda’s ongoing place in the global reinsurance markets.

Christian Dunleavy kicked things off by stating that the industry needs a long memory when considering the extent to which current market conditions will endure. It has taken hard work to get to a better place, and that should not be thrown away, he said.

“We want to ensure underwriting teams remember the hard work and hard years it has taken to get the portfolios to a sustainable level. That work is not complete. All the key indicators, macroeconomic and in our own portfolio, suggest that risk is increasing in the world.

“Therefore, it seems counterintuitive to undermine any of the hard work the industry has done to get to a point where we cover cost of capital. There are some areas where we are seeing competition, but we will focus on the bottom line over the topline.”

Peter Bell agreed that the market conditions are some of the best they have been in at least 10 years. He noted that Everest raised $1.5 billion less than a year ago which, combined with moves it made to reshape its portfolio, means it is well-positioned to now grow and take on more risk.

“We are well within our risk tolerances, so we see opportunity,” Bell said. “There is money coming into the industry but not much and we think rates will remain positive. There are definitely opportunities in specialty lines as well.”