Risks and opportunities in a new era: three CEOs debate the future

In attendance:

Don Bahr, president, global reinsurance, Markel

Shevawn Barder, CEO, AM Specialty Insurance Group

Tobias Sonndorfer, CEO, VIG Re (from January 1)

Moderator: Wyn Jenkins, Intelligent Insurer

In the face of global challenges such as climate change, escalating risks, social inflation, and tightening regulatory pressures, opportunities still exist for those who can manage capital prudently, build strong client relationships, and focus on long-term solutions. That was the key theme from three industry executives, despite their diverse portfolios and distinct approaches to addressing risk and opportunity.

In a relaxed Fireside Chat moderated by Wyn Jenkins at the Monte Carlo Rendez-Vous de Septembre, industry leaders Don Bahr, president, global reinsurance, Markel; Tobias Sonndorfer, CEO, VIG Re (from January 1); and Shevawn Barder, CEO, AM Specialty Insurance Group, shared their perspectives on these issues and the current state of the re/insurance industry.

Is it a true hard market?

The conversation kicked off by examining whether the market can be classified as “hard”. Bahr, representing North America and commenting on casualty and specialty lines predominantly (Markel’s cat business is managed by Nephila), challenged the notion of a universally hard market.

“I would dispute that it’s a hard market. Clearly, property is very hard, but in casualty and specialty lines—my focus—it’s different.” Bahr suggested price hikes in some of these areas had “crested”, particularly for directors and officers (D&O) liability, cyber liability, and excess casualty, although the market is now experiencing a rebound in pricing. According to Bahr, it is more of a firm market than a hard one.

From his view on the other side of the Atlantic, Sonndorfer painted a different picture for Europe. “It is not a classic hard market, but it’s hardening,” he said. The European market, after years of a soft market, “needed correction”, bringing prices to what Sonndorfer described as an “equilibrium”. He pointed out that nat cat losses in recent years, driven by secondary perils and climate change, have put additional pressure on reinsurers, contributing to rising costs.

Inflation and social inflation

One of the biggest challenges flagged was managing the “loss cost environment”. Bahr stressed that the re/insurance industry is grappling with the uncertainty around loss costs, especially in general liability and auto insurance. “The loss cost environment has been very uncertain—a rocky road.”

“The social inflation pendulum has clearly swung over to the plaintiffs.” Don Bahr

Social inflation, where litigation funding and larger jury awards have put pressure on insurers in the US, has made it difficult to predict losses accurately.

“The social inflation pendulum has clearly swung over to the plaintiffs,” Bahr stated, highlighting how litigation funding has dramatically increased the cost of claims settlements in the US. Bahr said this has made it difficult for insurers to keep up with loss costs. “The jury pools are out to punish large corporations right now,” he said.

Barder, who leads AM Specialty Insurance Group, agreed with Bahr’s concerns, pointing out that several major insurers have exited certain US states due to the impact of social inflation and regulatory hurdles.

“Insurers have to be able to charge an appropriate premium for the risk they’re taking on,” she explained, noting that a number of national players have exited states such as California because they feel unable to do this.

While these challenges are significant, Bahr expressed optimism about the casualty market, despite the “bumpy road ahead”, especially as the market responds with rate increases and continued limit management. He noted that certain lines of business, such as transaction liability and cyber insurance, are poised for growth. “We’re very bullish on certain lines. Cyber is another area we continue to support as it grows,” Bahr said.

Europe has largely been insulated from the worst effects of social inflation, but Sonndorfer noted that claims inflation is putting pressure on specific lines, particularly motor liability.

“With cameras in trucks, you can’t dispute what happened.” Shevawn Barder

“We don’t face social inflation in Europe to the same extent,” he said, but he added that lines such as motor liability were under pressure, primarily in countries like Germany.

“Claims inflation is driven by the cost side, where settlements have become much more expensive than premiums reflect,” he explained. In response, European insurers are increasingly exploring telematics and other technologies to manage claims costs more effectively, although Sonndorfer noted that these solutions are not yet widely adopted. “It’s here and there in Europe, but not a general game-changer,” he said.

Barder highlighted the US trucking industry’s widespread use of telematics, explaining how it has helped reduce disputes and manage claims more effectively. “With cameras in trucks, you can’t dispute what happened. It’s helping manage claims more effectively, especially in litigious environments like the US,” she said.

What keeps leaders up at night?

Bahr noted that while the industry has seen some stabilisation, with markets responding to adverse loss developments, the future remains challenging. “Settlements are significantly up, and getting arms around that is very tough for the industry,” he said.

For Europe, Sonndorfer identified the challenge of maintaining market position and underwriting discipline, particularly in nat cat and motor liability lines. “While we’re in a favourable market environment, casualty or motor liability in Europe is still under pressure, especially in key markets such Germany,” he said.

For Barder, the challenge lies in attracting capital and investor confidence, especially in the US market, where social inflation and regulatory pressures loom large. “Capital is fickle but I need money to grow and build my business, and attracting investment is what keeps me up at night.”

“The fundamental ingredient of the industry—risk—is ever increasing.” Tobias Sonndorfer

Causes for optimism

Despite the challenges, the leaders expressed optimism for the future of the re/insurance industry. “I’m very optimistic about the insurance industry,” Barder said. “Insurers aren’t the bad guy. They need to be buoyant and profitable—it’s vital for society and the economy.”

Sonndorfer echoed Barder’s sentiment, pointing to the opportunities that come with emerging risks. “The fundamental ingredient of the industry—risk—is ever increasing,” he said. “That’s a great opportunity for innovation, and for collaboration across the industry to tackle those risks.”

He emphasised the industry’s role in supporting societal transitions, such as moving toward net-zero economies, and the need for concerted effort. “I’m very positive. It’s not easy, but it’s important, and it requires work.”

Sonndorfer said his focus is strengthening client relationships and providing more tailored solutions. “For us, this notion of putting the client at the centre of our thinking and getting a relationship-based approach is important,” he said, adding that VIG Re is focusing on deeper collaborations with clients to navigate Europe’s evolving market dynamics.

“For us, it’s about building deep relationships with clients and providing solutions, not just products,” Sonndorfer said.

All leaders stressed the importance of promoting the insurance industry’s purpose to attract younger talent. “This is an industry of purpose—you’re doing genuine good in the world. After every natural catastrophe, the value of insurance becomes tangible. We need to be more outspoken about that to attract talent,” Sonndorfer noted.

Barder agreed, adding: “The insurance industry undersells itself to young people. It needs to market itself more. It may not be seen as very sexy, but insurance is a great career.”

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

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