Powered by:
BADEN- BADEN TODAY
Tuesday October 21, 2014
Bloodied and bruised but change is now inevitable T
he reinsurance market will increasingly feel bruised and bloodied as competition
intensifies triggering consolidation and even potential insolvencies, Peter Mills, chief underwriting officer of Endurance, told Baden-Baden Today. “The market will start to feel like I did after
falling off my bike yesterday,” he joked. “It’s inevitable and part of the cycle. But it will trigger consolidation and there will also be companies that withdraw—possibly insurance- linked securities (ILS) funds that can’t deploy their aggregate.” Mills, who is also head of global specialty
reinsurance & Europe property/casualty reinsurance at Endurance, said conditions in the market are detrimental for all reinsurers and Endurance is no exception. “It’s an extremely competitive environment,”
Mills said. “The best way to fight these trends is to employ good people and try to stay on the positive side of the market performance. We want to be a market-leading reinsurer—leaders survive and carry on.” Consolidation in the market is now inevitable,
he said. But he also forecasts insolvencies. “I believe history repeats itself and we’re in
a similar cycle to that between 1997 and 2001. In that market, however, the large multinational reinsurance buyers retained less and ceded more. That meant when losses occurred, they hit reinsurers more than insurers,” he said. “It’s different now. There’s a tremendous amount of capital available but the large
What’s inside
4 CEDANTS MUST REVIEW WEATHER RISKS: MUNICH RE
6 WILLIS-MILLER ADMIT TO MERGER TALKS
8 EFFICIENT ZURICH CUTS REINSURANCE PANEL
12 NOT ALL CEDANTS ARE RETAINING MORE
13 THIRD PART CAPITAL DRIVES INGENUITY: JLT
14 2013 STORMS HAD A SILVER LINING: PERILS
16 INDUSTRY MUST SELL ITS MERITS: GUY CARP
18 SOFT MARKET WILL GENERATE DISPUTES
20 REINSURANCE IS NOT A COMMODITY
22 S&P LLOYD’S ACTION TO BE FIRST OF MANY
23 NEW CAPITAL IS DRIVING INDISCIPLINE
22 20 12 8 4
Peter Mills
multinationals and super-regional insurers are retaining more risk. People are talking about doomsday but I think the cycle will change faster than people think if we have a loss.” He believes this for two reasons. The first
is that, because buyers are retaining more, they will be hit harder by losses and will react by buying more (Continued top of page 2)
Dominic Casserley
Graham Clarke Willis-Miller admit advanced talks
Willis and Miller have admitted they are in advanced discussions that could lead to a merger of some parts of their businesses. For full story see p6.
Reinsurers must assume more volatility: buyer R
einsurers should be assuming higher levels of volatility from cedants than they
have historically, helping smooth their clients’ long-term earnings in the process, believes Anna-Kitty Ekstam, head of reinsurance at Scandinavian insurer If…. Ekstam was picking up on comments made by Amer Ahmed, chief executive officer
of Allianz Re, at the opening reinsurance symposium in Baden-Baden. Ahmed described how Allianz had cut its reinsurance spend by almost 60 percent in the past seven years and was increasingly ceding more volatile business to its reinsurance partners—something he accepted should also be more profitable for them. Ekstam said If… agrees with this buying
www.intelligentinsurer.com |
www.bermudareinsurancemagazine.com
philosophy. While the insurer’s reinsurance programme has been very stable since the company was formed in 2002, she said the company has been increasing, and will continue to increase, the volatility of what it cedes to its partners. “I thought Amer’s assessment of what
reinsurance should be was very succinct and we agree with that philosophy,” (Continued bottom of page 2)
DAY 2: Tuesday October 21 2014 | BADEN-BADEN TODAY | 1
DAY 2
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24