The reinsurance market is gearing up for Rendez-Vous de Septembre in Monte Carlo where key players will come together to hold discussions ahead of the next renewal season. In a pre-Monte Carlo Press briefing, Dean Klisura (pictured), president and CEO of the reinsurance broking giant Guy Carpenter highlighted a number of the key themes he expects to be discussing with clients and reinsurers alike at the upcoming conference.
“There’s a number of key messages that go with that,” he said. “I think number one is that the market has ample capacity. Reinsurers are motivated to see our clients and do business in Monte Carlo. People in the market have described it as equilibrium with very engaged clients and reinsurers heading into this weekend.
“All of our clients will be entering these renewal discussions, hoping to differentiate themselves from their key peers in the marketplace and to really leverage their strategic trading relationships with reinsurers, on portfolio management and risk mitigation, across their portfolios. And I think reinsurance markets are really bringing a detailed and disciplined approach to each differentiated renewal.”
Important to keep in mind, Klisura said, is that despite lots of written concerns and discussions about US casualty, many of the market’s reinsurers are open and motivated for business at 1/1 and they want to grow their portfolios. Outlining some of the key factors impacting the market today, he noted that there are both headwinds and tailwinds impacting Guy Carpenter’s clients.
Starting with the headwinds, he cited the continued geopolitical volatility which is being seen around the world, and continued economic and social inflation. Economic inflation appears to be abating somewhat, as the market continues to see downward pressure on interest rates this fall.
“[There’s] continued macroeconomic uncertainty, and global cat losses accelerating in the first half of the year,” he said. “… It could be another year of $100 billion of cat losses in the marketplace. I’m sure many of you saw the Verisk study this week, projecting future cat losses upwards of $150 billion a year in the marketplace. Of course, much of this is dependent on, or attributed to, accelerating climate change impacting our clients.”
Alongside those headwinds, there are also a variety of tailwinds benefiting both Guy Carpenter’s clients in the marketplace and its trading partners. The reinsurance market continues to be very strong and well capitalized, Klisura said. “For the first time in perhaps three years, we’re seeing the advent of new startups and new capital really being discussed to enter the marketplace in 2025.
“Reinsurer returns on equity remain very, very strong. So, reinsurers want to hold their positions, want to be disciplined, and they want to write more business as we head into 2025. But we do expect continued and sustained underwriting rigor in the marketplace.”
The mood on the ground from reinsurance CEOs is that reinsurers are looking to hold their ground and their gains, and to keep structures, attachment points and terms & conditions where they are – which is producing very healthy ROIs for these businesses. “So, it’ll be a challenging conference for our clients, to try to make some headway in those discussions,” Klisura said.
There is also the continued focus on product innovation in the marketplace. There are a lot of interesting discussions being held about the future of parametric insurance with regard to parametric triggers and parametric products. “Every day you read about new cyber innovations, and our team will be in Monte Carlo really talking to our clients about innovations in the cyber marketplace,” Klisura said.
