Reinsurer strategies
through writing more quota share business.” Mark Taylor, KPMG
Taylor agrees. “We are seeing various strategies being deployed by
reinsurers including moving into new areas of insurance, deals with primary companies, share buyback, returning capital to investors and managing alternative reinsurance capital themselves,” he says.
through writing more quota share business. This could be through their own primary insurer, supporting its underwriting through the provision of latter being more risky and uncertain.”
as an attractive source of good business through direct ownership or programme participation.
The emerging markets are also attracting attention.
brings its own challenges,” says Taylor.
“An exciting area is innovation, in particular in the primary market with the development of new products. Could we call cyber cover an
despite current conditions in the casualty treaty market, Canopius has, in some cases, been able to capitalise on the adverse climate.
opportunities, which has allowed the group to adopt a greater risk appetite. Our expansion into the Latin American marketplace has
“While clients may be retaining more risks and reassessing their
and relevance as part of the Sompo Group, our increasingly established into new territories means that in fact Canopius has progressively become a top tier market for both brokers and clients.”
16 | INTELLIGENT INSURER | Spring 2015
in the casualty treaty market in London and develop its position in both mature and more emerging markets.
REIGNING VICTORIOUS angles, what impact will a shift in focus towards certain lines mean for the industry as a whole, and those already operating in these lines?
the decreased rate wave. This could also result in changes in terms and conditions and moving some risk into higher layers.
“Large players who have been around long enough to have seen it all
conditions if they are the leader,” explains Taylor.
“Another strategy is the slicing of the traditional portfolio and moving into higher layers. While this might increase volatility and capital requirements, the latter of no real concern to the larger players, it allows impact of this on the smaller players is to look to build scale through mergers and acquisitions.”
Taylor says that on the asset side of the balance sheet, the search for higher yields in the prolonged low interest rate environment continues.
capital investments. Others have moved into infrastructure investments which give guaranteed revenue streams, real estate and private equity investment,” he says.
innovative solutions to meet their needs to survive under the new regime.”
So, as reinsurers withdraw capacity from property catastrophe and move into areas such as speciality, pricing pressure in these lines of business will increase, putting pressure to increase ceding commissions.
motor market had seen in the past,” says Taylor.
“Overall this behaviour and market conditions are likely to favour the
pressures to consolidate.”
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