Continued market discipline expected: Urs Baertschi, CEO P&C Reinsurance, Swiss Re
As the reinsurance market heads to the annual Monte Carlo Rendez-Vous event, to begin discussions that help to shape the pathway towards end-of-year renewal negotiations, we spoke with Urs Baertschi, CEO of P&C Reinsurance at Swiss Re, who told us that market discipline is expected to be maintained.
During this recent Artemis Live video interview, Baertschi discusses Swiss Re’s priorities for the end of year renewal negotiations, his view of reinsurance market conditions, the need to continue working to close insurance protection gaps, the role of alternative capital and insurance-linked securities (ILS) and much more.
Speaking about what he expects to be on the agenda in Monte Carlo at the RVS, Baertschi told us, “Generally speaking, as we look at the environment, at the supply and demand dynamics, demand is up. Clients want to buy more reinsurance to de-risk their peak perils, and we’re going to be in an active discussion around that as an industry.”
Moving on to speak about terms and conditions, Baertschi continued, “When you look at the risk sharing between the insurance industry and the reinsurance industry, there clearly was a lot of movement about a year and a half ago and 24 months ago around this and it has stabilised since then.
“Primary insurance has caught up around the reality of what it means to have higher volatility in the frequency space as well.”
He added, “The risk landscape keeps evolving and so it’s really important for our industry, end-to-end, to reflect that evolving risk landscape in the kind of products that we offer, in the rates that are being charged throughout, in the structures, in the wordings, and so these are all going to be discussions that we expect to kick-off in Monte Carlo, and then throughout the rest of the renewal season.”
Asked about key issues related to price adequacy, attachment points and his expectations for reinsurance capital providers to remain disciplined, Baertschi expects relative stability it seems.
“We would expect the current environment, that we’ve seen so far this year, to maintain throughout the balance of the year as well,” he explained.
“This new-norm of more than $100 billion of insured losses from natural catastrophes is really here to stay, and that’s a market reality. And the vast majority of that is driven by smaller events that should be picked up in the retention of the primary insurers.
“So with all of that, the history, the financial results, how the balance between the insurers and reinsurers in the risk-sharing is finding itself in the market, we would expect the environment to remain largely similar to the discipline that we have seen so far this year.”
The full video interview with Swiss Re’s Urs Baertschi is embedded below and can also be viewed, along with previous Artemis Live video interviews, on our dedicated video page.
You can also listen in audio to all of our interviews by subscribing to the Artemis Live podcast here.
All of our Artemis Live video interviews have a focus on reinsurance, ILS and the efficiency of risk transfer and can be accessed here.
