Swiss Re ready for more nat cat, expects higher rates & tighter terms

Swiss Re intends to keep growing into the property catastrophe space as rising cost burdens push the pricing story ever further forward.

“Swiss Re intends to further grow and diversify its natural catastrophe portfolio,” management said in a statement laying out its stance ahead of the Monte Carlo Rendez-Vous. Swiss Re believes it is “well positioned” to provide cover to clients thanks to its balance sheet and risk capacity.

Swiss Re is adding its voice to the growing chorus of reinsurers at Monte Carlo suggesting that loss trends and rising global uncertainties, all multiplied by soaring inflation, spell rate increases and stricter underwriting.

“The re/insurance industry is now confronted with issues like inflation, risk of recession and geopolitical tensions” above and beyond nat cat and the pandemic, Swiss Re's CEO for reinsurance Moses Ojeisekhoba said.

“As we see cost drivers accelerating in this dynamic risk environment, insurance premiums must be carefully calibrated to keep pace.”

The Swiss Re short list of drivers: geopolitical tensions, inflationary pressures and knock-on effects such as energy shocks, cyber threats and supply chain disruptions and climate change with “no end in sight.”

On the demand side, a plethora of rising uncertainties can do little but increase primary carrier demand for reinsurance, Swiss Re officials noted.

Improved modelling, clearer terms and improved technical margins “to reflect the effective risk” are tops on the ingredient list as Swiss Re formulates its approach, CUO Thierry Léger noted.

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