Swiss Re claims select mid-year appetite; could capture volume: CFO

Swiss Re has the capacity and appetite for exposure growth at the mid-year in lines where it sees best rate adequacy, CFO John Dacey has indicated.

“We have not increased materially year-to-date, but we have an appetite in a number of the lines which are showing adequate pricing to go ahead and capture additional opportunities where we can,” Dacey told his company’s Q1 earnings call.

Swiss Re will have some work to do at the mid-year renewals. The combination of June and July treaty renewal deadlines accounts for abut 25% of the Swiss Re book and some of the accounts require attention.

“We’ve got some significantly loss-impacted portfolio renewing in that period,” Dacey said of the accounts due.

Swiss RE most recently achieved an average 19% rate gain at the April renewals, including what Dacey considers the traditionally less volatile Japanese market. The P&C Re division renewed contracts for $2.6 billion in treaty premium volume for the April deadline, a 5% volume increase compared with the business that was up for renewal. Swiss Re was “pleased, but not surprised” to see clients present at the April 1 negotiating tables “recognise the new supply-demand realities.”

“We would expect this momentum to continue,” Dacey said of the market trend going into mid-years. “We expect demand to be sustained and we don't see lots of new supply coming into the market.”

“We didn’t see it in April; we don’t expect to see it this summer,” Dacey said of supply.

Swiss Re is backed by a “robust retro program” following a program expansion versus the prior year to support Swiss Re’s mid-year renewal endeavours.

“We are not constrained to grow: we have the capital and as long as our clients are wiling to meet us on where our price expectations are, we should be in good shape.”

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