The dynamic between insurers and reinsurers must adjust for capacity shortfall at 1/1
Insurers are seeking more reinsurance protection as losses rise, partly driven by inflation, yet reinsurance supply is down on previous years: Swiss Re.
A rebalancing of the relationship between the insurance and reinsurance sectors is urgently needed and will likely happen during this year’s 1/1 renewals as increased losses across the insurance industry clash head on with poor results for reinsurers.
This is the view of Urs Baertschi, regional president, chief executive officer Reinsurance EMEA, and member of the Group Executive Committee at Swiss Re.
He told Baden-Baden Today that a supply-demand imbalance is emerging, which is bringing things to a head. Insurers are seeking more reinsurance protection as losses rise, partly driven by inflation, yet reinsurance supply is down on previous years.
“The experience and the results for the reinsurance industry have been quite poor over the last five years. The industry has been paying for losses that are much more attritional in nature and should often be covered by the retention of the insurance companies,” Baertschi said.
“We have an environment where demand from our client insurers is up yet, at the same time, supply from reinsurers is down. Something needs to change. We anticipate a rebalancing in that relationship between the insurance and the reinsurance industries.”
He said two big factors will inform any rebalancing of this relationship. On one hand, structures, retentions, and terms and conditions will change; on the other, pricing will increase in a way that appropriately reflects the risks being taken on.
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CCR Re eyes Tier 2 status
CCR has outlined plans to sell a majority stake in CCR Re. Here, the French reinsurer’s Edouard Vieillefond outlines the timeframe and rationale underpinning that decision.
CCR is aiming to drive its market reinsurance unit CCR Re to achieve Tier 2 status as a reinsurer by 2027 on the back of a €200 million capital increase combined with a sale of existing shares, so that CCR would keep a 30 percent stake overall. This operation aims at sustaining CCR Re’s growth, in the continuity of the 2016–2022 development plans, with a goal of €2 billion in gross premiums by 2027.
That is the message from Edouard Vieillefond, deputy chief executive officer of CCR since September 2022. He was appointed, alongside Bertrand Labilloy (who remains CCR CEO and CCR Re chairman and CEO), partly to bolster CCR’s executive management team to support this operation.
“The aim is to enable CCR Re to attain Tier 2 status in the next few years,” Vieillefond said.
