News


WEDNESDAY 10.31.12


Sandy will blunt downward rates pressure A


lthough Hurricane Sandy’s full impact on the re/insurance industry will not become


clear for many days yet, it will certainly act as a reminder to the industry of the catastrophic hazards it faces. It will also prevent any downward pressure on rates during renewals negotiations. That is the view of several senior executives


of reinsurer Alterra speaking at the PCI event on Monday. “It will have a sobering effect on the in- dustry and certainly blunt any downward pressure  of Alterra Reinsurance USA. They also believe the storm could trigger a


reassessment of the risk models relating to wind- storm risk in that area. “It is surprising to witness a storm of that magnitude, at this time of year,         chairman of global reinsurance at Alterra. “It is unprecedented. It could lead to a re-evaluation of the models. I think it also shows that weather is  Wafer says in many ways Hurricane Sandy


resembles the ‘perfect storm’ which the industry constantly uses as a case study and which last oc-    instance, three storms converged. The difference


Tod Costikyan, managing director of Alterra Reinsurance USA; David Kalainoff, president and  Tom Wafer, chairman of global reinsurance at Alterra


was, that storm remained offshore whereas this  David Kalainoff, president and chief under-


    the storm will also represent a timely reminder to reinsurers of the importance of remaining on the ball when it comes to underwriting and setting rates at appropriate levels. He says the company has observed rate in-


Reinvented and ready to go


After a year of change, Brit Global Specialty is in good shape and ready to do business under its new structure, says Jon Sullivan, portfolio director for short tail treaty reinsurance.


J


on Sullivan, portfolio director for short tail      


 Dana Point, California, with a simple message to convey: after a year of substantial changes, the    do business. - lands Holdings, a company formed on behalf of


two private equity investors: Apollo Management and CVC Capital Partners. Since then, it has refo- cused and streamlined its business, selling off some parts and focusing on its Lloyd’s syndicates again. The changes have continued this year. In Jan-


uary 2012, it merged its reinsurance and global markets strategic business units to form a single      Global Specialty. Within this, it created four divi-


8 | INTELLIGENT INSURER —PCIAA TODAY | Wednesday October 31 2012


Regardless of the eventual losses, Hurricane Sandy should remind the industry of the perils of models and prevent any downward pressure on rates, say executives at Alterra.


creases coming through on the primary side in the US, with some of the big commercial carriers publicly stating that rate increases are necessary and explaining why these increases are needed. “There are some good signs out there that cor-  Costikyan agrees, but says that generalisation


is impossible. Some lines are seeing increases but on others, such as the casualty side, it varies line by line with some moving in the right direction and others remaining stubbornly soft. “Where there have been losses we are see-


 where there have been few losses, it remains tough. Professional lines, for example, are seeing some increases but they are barely keeping pace  -


cally, he is seeing insurers retain more risk. He says this is understandable given the pressure         targets. On the property-catastrophe side, he notes that demand is increasing overall but Al- terra is careful how it expands into this area with its risk appetite limited by aggregates set at board level. 


sions: long tail insurance, long tail reinsurance, short tail insurance and short tail reinsurance, the unit led by Sullivan.       its UK insurance company, to RiverStone Hold- ings, a run-off company that is part of the Fair-        disposals have left it to focus on its Lloyd’s syndi-  “It has been a year of change for us. Clients


understand what we have done, but we are still ex- plaining things and letting them know that we are  the odd question from clients, which we are happy to answer. The portfolio has changed a lot so we are 


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