Reinsurance: At a tipping point?

After one of the toughest year-end renewals the market has seen, 10 senior executives debated what went right, what went wrong and what they expect in the future, in a roundtable sponsored and hosted by AXA XL Re.

In attendance:

Trevor Carvey, chief executive officer, Conduit Re

Adam Champion, EVP, Inver Re Capital Advisers

Neville Ching, chief executive officer, ReFlex Solutions

Peter Giacone, senior managing director, Global Head of Insurance Ratings, KBRA

John Huff, chief executive officer, Association of Bermuda Insurers and Reinsurers

Raveem Ismail, head of parametric, Africa Specialty Risks

Jessica Laird, head of property, Nephila Capital

Lara Mowery, global head of distribution, Guy Carpenter

Mark Twite, chief executive officer, Bermuda, AXA XL Reinsurance

Matthew Wilken, chief underwriting officer, Hiscox Re & ILS

Moderator: Wyn Jenkins, managing editor, Bermuda:Re+ILS

“The market is in a kind of evolution.” Mark Twite

Mark Twite: The Bermuda 1/1 renewal was hectic and turbulent. We’d had six years of significant losses in the reinsurance market and the dynamics had to change, so on January 1 there were significant rate increases. Partly because of this a number of placements went to the wire, which wasn’t very comfortable. Many clients took a greater retention; there was a lot of tightening of conditions and some exclusions introduced.

But things did generally get placed. Reinsurers with a clear strategy and their retrocession in place were in a better position and you could see that dynamic working its way out.

When we got to April, with the retrocession in place, it was a little less hectic and it was similar in June. Certain exclusions being pushed for on 1/1 were not allowed in June.

It was pretty exciting, with some changes I thought were necessary given the loss activity of the last six years. But I still feel the market is in a kind of evolution, especially on property-cat.

“We haven’t seen an abundance of new capacity come in.” Matthew Wilken

Matthew Wilken: I agree that the 1/1 renewal was tumultuous, late, fraught. Is it more orderly now? Yes. While it was chaotic and late, there was still ample capacity and pricing was not the major problem—the market can always settle on pricing. It was the terms and conditions that were all over the place. Although that has largely standardised now, the retro market continues to be very tight. That underpins a lot of people’s capacity, and I don’t see that softening significantly.

An area of interest to us is the growing demand for buyers to look at cat bonds. People are using it to augment or replace the traditional retro protection and we need to be cognisant of the impact.

More broadly, we haven’t seen an abundance of new capacity come in, yet we are seeing an increasing demand from clients. It is nowhere near as much as was touted in Monte Carlo last year, but there’s certainly increasing demand and I’m not seeing the increasing capacity to satisfy it.

“The underlying market is behaving pretty responsibly.” Trevor Carvey

Trevor Carvey: I agree that it was the contract wordings and terms and conditions that caused the biggest debate and this was driven by the reduced capacity. Since January 1, there has been more clarity around the wordings and our view is that we’re probably seeing that continue now.

I am not sure wordings and exclusions have materially changed but the market is trying to get to grips with a number of newly created definitions. For instance the terms around strikes, riots and civil commotion (SRCC) were debated a lot. The market is working towards solutions.

On the property side, there’s no doubt buyers and investors have looked more at cat bonds. Capacity has arrived in that space, especially through the mid-year renewals period and that has been reflected in pricing in the bond market.

In terms of casualty, it’s still pretty disciplined, with checks on limit and deployment. There is generally we believe a well-disciplined approach from our clients and the underlying market is behaving pretty responsibly.

“There was also a greater use of captives.” Jessica Laird

Jessica Laird: I agree that it helped that the rate was there. There was less jockeying for rate at June; instead, the debate was more on terms of conditions and retentions. We also observed at 1/1 and 1/6 retentions continued to go up—on average increases were probably 30 to 40 percent at the start of the year, and that held in many cases through June.

There was also a greater use of captives or companies retaining bottom layers of programmes. That took some demand off the table and so there’s probably some unmet demand on the sidelines which could come back into the market if the capital were there.

In terms of cat bonds, they have dropped since some February highs, but for all US perils, pricing is still up 50 percent over June 2022. There was talk around softening, but they are still at levels nearing highs and they certainly improved year on year. That’s the space where capital can flow the easiest, so single-digit gains in capital raised into the cat bond space relative to the size of the global reinsurance industry, are notable but not significant.

“Securing retro capacity is very important to us.” Raveem Ismail

Raveem Ismail: We’re a managing general agent (MGA) and a reinsurer, and only two years old, so securing retro capacity is very important to us. If we had not had those relationships in place prior to January 1, it would have been far more challenging.

John Huff: To offer some perspective, the Association of Bermuda Insurers and Reinsurers is 30 years old; it was started right after Hurricane Andrew. Fast-forward 30 years and there was Hurricane Ian. The similarity is that Bermuda capital and capacity was and is coveted.

There is not much new capital coming into the market, which makes our market more desirable. With the evolution of terms and conditions and rising attachment points, we are hearing of increased interest on complementary risk transfer solutions such as captives.

But, all roads lead to Bermuda. If you squeeze the balloon in Bermuda on one side, another grows: maybe on the captives side or insurance-linked securities (ILS) or retro. So it can be a win-win for Bermuda whatever the need is.

Is there adequate capital? There are increasing trends in areas where customers and the economy want more capital, where entities are having to define, for instance, their climate risk. Once defined, they want to transfer or reduce it. Another example we are seeing is a shift to standalone cyber. The risk has to be accounted for by either policyholders or ceding companies, and they’re going to seek more capacity.

“The captive represents a more efficient way to deploy capital.” Peter Giacone

Peter Giacone: We’ve seen that on the primary side. We rate a lot of primary companies in Florida and it’s amazing how many are starting to use captives. They will frequently tell us that at some point reinsurance pricing doesn’t make a lot of financial sense for them so they increase their retention. They set up the captive and build their programme around that.

It’s kind of a win-win for both sides because the reinsurers aren’t always comfortable playing in the lower layers of the tower. The captive represents a more efficient way to deploy capital. And as pricing environments change, the risks change, they can be flexible. It’s a fascinating dynamic.

Lara Mowery: I generally agree—January was very difficult from a broker’s perspective. It was difficult from everyone’s perspective but for different reasons. We could see some signs of that coming from July 2022 which was extremely constrained from a capacity standpoint. When you added in the additional inflationary impacts on the January portfolios, even before Ian happened, the challenges were clear.

A number of reinsurers said they wanted to cut back materially on property-cat; some withdrew completely. We were focused on how to place the existing book of business, yet you often needed to account for 10 to 15 percent more value because of the inflationary impact. And then Ian happened.

Based on market contraction and reinsurer messaging, a lot of our focus through the fall was trying to prepare clients for the fact that a material change was going to happen, so as we got into the pricing and the coverage conversations, they weren’t completely unprepared. It was clear capital was not going to tolerate the ongoing low returns.

We tried to do a good job of messaging that ahead of time and getting clients to think things through. We knew price increases were coming, we knew the attachment points would increase. What surprised everybody was the degree to which reinsurers looked to change wordings and coverage definitions. The requests were different from reinsurer to reinsurer.

What were some of the sticking points in negotiations? How were these resolved?

“Now, it’s a more standardised conversation.” Lara Mowery

Lara Mowery: Reinsurers had what I called a wish list. There were up to 20 things or more on some people’s lists of what needed to change. Some were consistent, such as terrorism and SRCC, and there was some tightening up of loss occurrence definitions. But there was also a whole bunch of stuff that was not common across requests.

That’s where the chaos really kicked in. When we got down to the last two weeks of the year, people considered what was essential to get deals done. The prices moved, attachment points moved, but the wordings were holding up being able to bind.

We had to consider what had to change versus what’s nice to have. And that was what was sorted through in January in more detail. Now, it’s a more standardised conversation. We still saw some wish lists at mid-year, but it was more consistent.

The debate around SRCC is a great example. Reinsurers wanted terms and conditions changed; they wanted coverage to be more clearly defined. But at the same time, clients are buying reinsurance to protect themselves.

SRCC has always been covered. Some reinsurers looked back 10 to 20 years to how coverage had been provided prior to the soft market for guidance. For SRCC the concern of reinsurers was around how society has changed: social media can be a driver now. The concern was not so much whether the industry is equipped to cover it, but that we’re potentially not equipped to cover it on a globally aggregated basis.

But defining how those coverages work was very important because we wanted the reinsurance industry to be responsive, to provide a product that people value.

 “I can imagine brokers with whiteboards with their wish lists.” Mark Twite

Mark Twite: I can imagine brokers with whiteboards with their wish lists, crossing things off and deciding which ones to debate. Reinsurers recognised that market dynamics required a return to a decent return on the capital provided. But I suspect they also tried to take the opportunity to debate other changes they probably wanted five years ago but couldn’t get back then.

Lara Mowery: It was a very wide range of requests and individual reinsurers approached it differently depending on loss experience or the way that a particular management team was sensitised to a certain type of risk. Given how valuable capacity was for catastrophe in particular, it drove some of those requests.

Even by mid-December we didn’t know if some programmes would be done. We were staring at a 30 percent gap in some cases. In the end, market dynamics shifted enough to get deals placed. There was a big shift in catastrophe attachments in many cases, 60 percent average increases for North America, but things got done.

The flipside of all this was some of the innovation. Twenty-five years ago reinsurance broking was very formulaic: you have this much surplus, your retention is X percent. Now, reinsurers can pivot very quickly and change the dynamics and the portfolio composition. There is a better sense of portfolio management and cedants have a new reality of how reinsurance protects them.

They’re responding to differing reinsurance conditions by having a better sense of their policy structures, deductibles, risk concentrations and how to budget for reinsurance for 2024.

What is investor sentiment towards the industry now?

“The industry has to deliver if it wishes to remain attractive.” Mark Twite

Adam Champion: There’s still considerable appetite for insurance, but they need to see the returns. There is also interest in supporting brokers or MGAs as they want the cash flow, the EBITDA, and to be able to achieve predictable earnings. They’re still having trouble seeing that with balance sheet investments.

If the industry could produce a couple of years of strong discipline producing healthy balance sheets, there is a mountain of capital waiting to come in. However, at the moment, they’re not giving much ground and they’re not moving quickly.

We continue to see capital supporting MGAs and brokers, pushing valuations up. And while investors continue to respect high-performing underwriting, they need to see wider discipline of the market, then they will begin to back the risk-takers again.

“Pricing held firm despite increased appetite.” Lara Mowery

Mark Twite: The reinsurance market offers investors a return over a number of years and the industry has to deliver if it wishes to remain attractive. In short, the industry must find a healthy balance between disciplined underwriting and risk-taking because if you can get good return somewhere else with less risk, why wouldn’t you be investing in that? 

Lara Mowery: This dynamic has created a market environment I don’t think I’ve ever seen, where we had significant capacity rebound on the mid-year renewals versus January 1, but pricing held firm despite increased appetite. In North American property-cat it was capacity-constrained at January 1: excess capacity was essentially non-existent. Fast-forward to mid-year and we definitely have more capacity.

A little new capital came in and some existing reinsurers reallocated internally. But the required returns on that capital are written in stone. Nobody has the bandwidth for any sort of softening. It is a slightly odd set of circumstances where we have plenty of capacity, but clients aren’t seeing pricing shift or terms and conditions erode. I don’t see that changing in the near future because that capacity has such rigid requirements.

“There’s capital actively exploring the casualty business.” Adam Champion

Adam Champion: The good news is that investors are willing to commit capital for a longer period. They’re willing to commit over three, five or even 10 years and open themselves up to multiple classes of business. They want to understand specialty casualty and cyber, to understand these risks in a way that historically they weren’t interested in.

They’re also focused on leverage. That comes up in almost every conversation, which is creating a very interesting dynamic between Bermuda and Lloyd’s. If you look at what Lloyd’s has done over the last couple of years with Decile 10, and apply their leverage, that’s a very interesting dynamic for investors to consider.

On the back of that, there’s capital actively exploring the casualty business. If they can show significant internal rate of returns on the back of considerable leverage, they’re willing to wait five to 10 years.

Matthew Wilken: To what extent is liquidity a challenge or concern for investors?

Adam Champion: In general, liquidity is a decreasing concern among investors actively considering an insurance investment. There are of course dedicated property-cat investors for whom liquidity is still important because they have built a strategy around it.

However, many of them are still dealing with trapped capital, and feeling a bit helpless about it. There remains no good solution for trapped capital—which in some ways is absurd. Of course the private equity folks always look at three to five-year exits, but the sovereigns and pension funds generally have fewer liquidity concerns.

“There is also a search for diversification.” Peter Giacone

Peter Giacone: I agree that there are some big investors with dry powder waiting. There is a lot of that in the private market and it’s patient capital. It’s a good fit for taking a multi-year approach especially in a much better pricing environment. Your leverage point is also a great one. That is very much where they’re looking at casualty and other lines.

Investors are cautious on balance sheet reinsurers and you see that dynamic going across multiple levels. They are instead looking at life annuity, or focusing more on the primary side. There is a desire to manage the risk and the portfolio, to offload some of that volatility. But there are some major players who can provide some very good pools of capital and be patient, take a very long-term view and provide some real support to the industry.

It’s been a very interesting dynamic. There is also a search for diversification, uncorrelated risks. No matter what asset class you held at the end of last year, you lost money. Usually, bonds and stocks move in different directions. But everyone’s saying: “My equities went down, my bonds went down, now what do I do? Wait a minute, insurance risk is over here and the price is rising quickly; maybe that’s a good fit with my risk/return objective”.

Adam Champion: There has also been a drop in initial public offerings (IPOs), which reflects some of these same trends. It is worth mentioning that we are seeing rapid growth of the legacy sector here in Bermuda. There’s a huge opportunity in the legacy market to solve some of these problems, to create exits and liquidity on these longer-tailed lines.

Lloyd’s has figured this out to some extent, but if you could take that model and improve upon it with a more creative legacy market you could come up with some very interesting structures for capital to come in and support longer-tail lines.

“There’s a huge opportunity in the legacy market.” Adam Champion

Raveem Ismail: A good example of that can be seen with Fidelis, where the MGA and the balance sheet entity were valued very differently. That can be viewed as guidance until external market conditions change.

The insurance industry does like to back innovation, whether on the balance sheet side, the broker side, or the MGA side, but if you can get 5 percent return risk-free, why would you risk your capital for less than 7 percent? That said, some will look at the diversification play as opposed to the straightforward return.

The bottom line is that in the long term, you cannot replace good underwriting, good distribution. When Africa Specialty Risks came to Bermuda two years ago, it was fantastic to deal with a heterogeneous regulatory environment, which is very different from what you see in North America or even Europe. You realise it allows you to do more with the same amount of capital. There’s certainly a boots-on-the-ground aspect and it allows us to be flexible and nimble, and it’s the reason I’m here talking to people. 

“You cannot replace good underwriting, good distribution.” Raveem Ismail

We are also seeing a lot of interest in the parametric side. Conversely, if you look at what’s happened in Turkey with the earthquake, there were indemnity policies. None of the building codes were followed but the government has forced the insurers to pay. If that same cover were to be provided parametrically, then if it shakes, we pay.

The parametric opportunity there is huge. There are so many small businesses in places such as Africa where these people will never be covered by indemnity insurance but we can provide that resilience in a way that means we don’t need to touch the client.

That’s absolutely key. I can’t go and speak to hundreds of thousands of small farmers. But they need to know that there are insurance companies that can take on the risk. Then they need to know there are reinsurance companies to whom they can cede the risk.

We need the insurance world to take a punt and back new things. We have now seen so much volatility we know that there’s demand there. So it’s a way for us to grow into places where we haven’t grown before.

Are the market conditions you have described conductive to innovation?

“Political risk and terrorism are significant growth areas.”  John Huff

Matthew Wilken: Necessity is the mother of invention, right?

Lara Mowery: There are so many wider issues—from general market dynamics, interest rates and inflation to the war in Ukraine and general financial market volatility. Yet we now also need to consider what an insurance product should do in the context of tackling something like climate change. We need to have the financial infrastructure to be a component of that solution.

We’ve been spending some time on intellectual property (IP) insurance and how that flows through the ecosystem of re/insurance. There is a massive funding gap for the creators of emerging technology solutions. How do they unlock capital? We all know the value of intangibles and the value of that IP can be substantial compared to physical assets.

We haven’t as an industry quite figured out what that right product is yet, but we want to create a valuable ecosystem around it. That requires innovation—there will be some trial and error but that is okay. It’s such a complex world.

John Huff: The specialty market is a great example of innovation at the moment and again, all roads lead to Bermuda. 

“There will be some trial and error but that is okay.” Lara Mowery

If some doors close, if you see terrorism provisions being removed from contracts, that can trigger the growth of a standalone terrorism market.

Political risk and terrorism are significant growth areas. The Bermuda market covers about a third of the UK terrorism risk through Pool Re, so it’s already a place where we have expertise. I see the same thing with cyber. If you’re pushing toward standalone cyber, then you’re looking to Bermuda.

We’re also seeing significant capture in Bermuda for US mortgage risk. We’re becoming the dominant player in understanding and providing capacity for that product.

Jessica Laird: A lot of specialty risks have a sustainability aspect to them. We have a climate fund, it’s about $800 million from investors who want to back the insurance industry’s role in enabling the transition to net zero. We do some IP insurance, agriculture, renewable energy, clean technology and some carbon markets.

We are looking at insuring renewable energy battery storage, as one example. The concept is like a liability product that you’d have for battery storage, but the energy source is renewable.

Does the industry attract the right talent to deal with these challenges?

“We want our underwriters to be inquisitive.”  Trevor Carvey

Lara Mowery: Our skillset is evolving. We have a whole data science team that we didn’t have several years ago. And there is a major need to build out those different sets of talents to help us become more efficient and more thoughtful about risk and identify trends. How are we as an industry going to use artificial intelligence (AI) going forward, for example?

Trevor Carvey: You might ask how many underwriters have been through a hard market, but it is more important in my view to have on board underwriters who are genuinely inquisitive and want to understand the dynamics of what’s happening and what rates are being charged at the ground-up insurance policy level.

Even though they may not have seen the hard market, they need to be prepared to listen and ask the right questions to evaluate and price risk. It is a learning process for them as the market evolves. We want our underwriters to be inquisitive around their work—that’s the big attribute that we try to look for.

“It’s about how people with different skills understand each other.”Neville Ching

Neville Ching: Communication is key, particularly in big groups where you’ve relied on technology for many years and now you’ve blended old-school and new products. It’s about how people with different skills understand each other and communicate well. People have asked me: “How difficult can this be after 40 renewal seasons?”.

Yet they’ve all been different. The technology people can’t understand that because they look for uniform flows and patterns.

Mark Twite: Two words are important for me: blend and balance. Some 20 years ago insurance was not seen as an exciting career. That has changed. I’m proud to be in re/insurance but you do need that blend. The youth of today have different views, different thoughts, diverse opinions, and you need those in the organisation to start thinking differently.

I’m not sure how much innovation I bring to the table without people pushing me to bring that innovation. The people pushing you are the younger ones with fresh perspectives and the willingness to look at things differently. If you then blend that with the experience of 40 renewals, it can be powerful.

“The industry has evolved to be far more data-driven.” Jessica Laird

Adam Champion: I agree that we are fundamentally a data business. There is an arms race in our industry for data scientists and we need these new skillsets working on innovations such as algorithmic underwriting.

Jessica Laird: AI has limitations—this is still a relationship and people business. Robots are not going to be empathetic, they’re not going to think about partnerships, or be creative problem-solvers even when you structure all the algorithmic parameters. You have to remember the soft skills humans have, and that’s certainly our focus in hiring: the empathy, the creative problem-solving, seeking to understand and focus on the trading and investor relationships.

The industry has evolved to be far more data-driven and analytical research-based. We’re using that data to continue to evolve our view of risk and better understand the complex issues our industry is facing. But we need a mix of what the data is telling us and the judgement with how we apply it when we engage with counterparties and brokers.

“The service delivery becomes even more important.” Matthew Wilken

Matthew Wilken: There are so many exciting developments thanks to the exponential growth in data and AI. The impact on the medical profession will be huge, for example. You have highly paid doctors who are paid to make diagnoses, and nurses paid considerably less to deliver the service itself. The doctor’s diagnostic skillset is more likely to be replicated by the use of AI than that of the nursing staff!

That means the service delivery becomes even more important. We’re going to be in the same situation: we have to deliver the service, but technology and AI might determine the right mathematical price for the product we’re selling.

What future opportunities and challenges do you see?

“Inflation is the driver to have the eye on.” Trevor Carvey

Neville Ching: There are a few ticking timebombs in terms of some of the losses. There is loss development in the casualty/specialty world, the Russia-Ukraine war. The cost of capital is very difficult to plan for.

In terms of the next renewal, we are hoping for a nice flat outlook. I’m not sure it’s going to be that, particularly if there is a global recession.

Trevor Carvey: Given inflation, asset prices will likely be indexed up again over time, so there’s still going to be an increase generally in the underlying demand. That’s healthy and on top of that we have uncertainty of supply around some of the industry issues on large loss settlements and circumstances. So when you look across the differing classes a lot are looking pretty good right now.

The emphasis to my mind will still be on diversification and being able to continue to allocate capital wisely, and inflation is the driver to have the eye on, particularly in the casualty space. Some of these factors would of course be considered headwinds, but overall there’s still a lot of opportunities out there.

Matthew Wilken: ESG is on every director’s lips in every boardroom. It’s going to underpin how we address some of the key global challenges. Climate is one part of that. I look forward to how we deal with that. 

“We’re in a good place, but we must not be complacent.” John Huff

The things that concern me are the systemic risks. We’re very good at identifying individual specific risks, diversifying them away, making sure we get to the most-cost-effective solutions while balancing risk. But we are facing significant systemic risks, whether it’s a global financial meltdown, or geopolitical problems such as happened in Russia. These were foreseen.

The problem is whether the industry priced for it and understood the ramifications of the severity when it occurred? The answer is: probably not.

John Huff: Reputational risk for the industry and for the Island is always a concern that requires vigilance. Bermuda is probably in better shape than we’ve ever been. There was a time when a Bermuda company couldn’t be on the S&P, much less the S&P 500, but we now have 30 years of maturity and the acceptance of our regulatory regime, our government, our English language and law. We’re in a good place, but we must not be complacent.

We have a lot of education to do, but the industry reputational risk is something we always have to be on top of with policymakers and international standard-setters. Are the products we’re delivering what consumers think they’re buying? If there is a mismatch, we’ll have to answer to it.

“There’s still the hurdle of an investor’s return on capital.”Jessica Laird

Jessica Laird: Climate change is a topic at the forefront for both us and our investors. Our investors want to understand: how we’re thinking about it, charging for it, and assessing the risk implications. One can make reference to the IPCC report, which essentially says: “We’re not expecting more hurricanes, just for them to be stronger”. You can stress-test that by augmenting your models, and see what would happen to your portfolio or a given deal if there are more category 4s and 5s, and fewer 1s and 2s. At least within our asset class, it’s something we can assess with a reasonable degree of sensitivity, but not necessarily precision.

Generally, we’re trying to demonstrate to investors that we think the premiums we’re earning today are sufficient to account for that change in the risk. But even if there’s rate sufficiency today, which is probably the case, there’s still the hurdle of an investor’s return on capital that needs to be met.

I do think there’s a lot of new capital on the sidelines, but they’re not moving at a rapid pace. More confidence needs to be restored in the asset class. Improvements with rate, tightening terms and conditions (such as loss definition) helps restore that but there’s going to be a sustained level of where we are now. The good news is that if capital does come in, we think there’s also risk sitting on the sidelines (some companies are not buying at the top or retaining bottom layers).

“A variety of risks will be considered.” Adam Champion

Adam Champion: This is a capital-intensive business. We call one aspect of that “third party” capital but it’s just capital and this business requires capital. What’s most exciting for our whole industry is, for lack of a better term, ILS 2.0. And if ILS 1.0 was collateralised property-cat driven where people underwrote it for a fee or used sidecars, ILS 2.0 is going to be significantly larger, multi-class, multi-platform and a variety of risks will be considered, such as cyber, digital assets, political violence, and terrorism.

In these scenarios capital will work in a very different way. It’s not necessarily going to be a managed fund or sidecar structure. It will come in lots of different flavours, aligned with rated vehicles and different underwriting platforms. This will be a true blending of the traditional financial markets and our business. This is inevitable and is happening as we speak.

Peter Giacone: From a rating agency perspective, when we look at the reinsurance market, we’re cautiously optimistic. There’s been a resetting from a pricing perspective, but it’s going to come down to what it always comes down to, not ESG or AI, but sitting in a room like this and having a conversation with management. How are you going to navigate the choppy waters? There is a lot of uncertainty and the winners and losers will be determined by the ability of management teams to navigate through volatile markets. That’s what’s going to make the difference.

“Whether it’s technology or product, we need each other to get there.” Lara Mowery

Lara Mowery: Partnerships and good communication are key. December was not pleasant for anybody, but we dug in and kept talking to each other and worked our way through it. We have hit a better understanding of what the future market looks like and we can be responsive within that. Capital sitting on the sidelines can start to get a better picture of market dynamics.

We’re talking about innovation and solving some of these bigger problems but no one company can step in and do any of this alone. That dialogue between the insurers, the reinsurers, the brokers, etc, is what’s going to get us to some of those bigger solutions. Whether it’s technology or product, we need each other to get there.

“We work together, and we try and make the future a better place.” Mark Twite

Mark Twite: It’s a massively uncertain world. If we look back, the last 10 years will be a major point of human history. It’s very difficult to understand, so we need to be agile, able to adapt, flexible, and we need to listen and be open to opportunities. We need to work together.

We have a significant purpose in this world, and I worry about my kids. I don’t know what it’s going to be like next year, let alone in 10 years. So I have to make sure it’s not about me, it’s about us, globally. We listen, we work together, and we try and make the future a better place.

We all have a part to play as to what happens in the next renewal season, and it’s complex. Anything that happens to supply and demand will have an impact. And the way the world is now, that could be pretty much anything.

Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.