The industry is increasingly becoming split into different tiers of reinsurers – but there is little hope for those that find themselves in the lowest tiers.
This is according to Denis Kessler, chairman and CEO of SCOR, who was speaking at the Standard & Poor's Ratings Services' 30th Annual Insurance Conference recently.
He believes that significant changes in the industry are creating multiple tiers of companies. The battle for firms now, is to ensure they are in at least tier 2, he argues.
“Tiering of the industry is the key word in 2014 and 2015,” Kessler says. “It’s not just a question of size, it's the quality of underwriting and the choice of business lines where you could prove to your clients that you're competitive.”
Tier 1 companies, he explains, essentially can meet clients' demands both qualitatively and quantitatively. He says that tier 3 companies, however, "should buy a t-shirt that says 'no future’” because he believes they are unable to keep up with the bigger players in this environment.
Amid this tiering is an air of consolidation. A conference survey of delegates revealed that 51 percent of attendees believe there'll be active M&A in the next year, with as many as five major transactions.
Kessler, SCOR, Standard & Poor's, resinsurance, tiers, tiering
