Juan Andrade, president and CEO of Everest Group, recently addressed rising concerns over social inflation and legal system abuse, which he says are contributing to higher claim severity across the re/insurance industry.
When asked about the upcoming reinsurance renewals, Andrade noted that the outlook will vary depending on the line of business and geographic region.
“I think from a property catastrophe perspective… this year is going to be fairly seamless. I think most people have gotten used to the new norm of sort of where we are right now. I think, again, that’ll be a fairly seamless renewal,” Andrade said in an interview with AM Best.
He explained that many in the market have adjusted to current conditions and added that the main topic of discussion now revolves around casualty and the broad-based trends in the US, particularly the effects of social inflation and legal system abuse on claim severity.
In response to a question about changes in reinsurance buyer expectations, Andrade pointed to an adaptation on both sides of the market. He observed that reinsurers have generally raised attachment points, leading cedents to modify their purchasing strategies and programs.
“There has been an adaptation to the new regime,” Andrade remarked.
Andrade also emphasized the crucial role of the insurance and reinsurance sectors in supporting the global economy. “We just can’t do business without having insurance and reinsurance,” Andrade said. “I think we continue to be very relevant and very important to that effect.”
He said the industry’s importance is clear, as it allows businesses and individuals to recover and continue operations following major disruptions.
“We are the oil that fuels the world economy,” he said, underscoring the industry’s ongoing relevance in helping clients manage risks and recover from losses.
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