SURVEY
Profitability and better rates take precedence
Rates, capacity and terms and conditions will be the main talking points at Baden-Baden—but climate change is also an issue, while companies crave a return to solid profitability.
Improving profitability, changes to terms and conditions and growing market share top the concerns of delegates attending Baden-Baden this week. But climate change is not far behind in a picture that illustrates the sheer uncertainty the industry is experiencing at the moment.
That represents a snapshot of some of the results from a pre-Baden-Baden survey by this publication, surveying the wider markets and designed to outline the concerns of the market and potential talking points at this event.
These core issues dominated the responses of those surveyed, when asked about their main concerns in this renewal season. Able to select multiple issues, respondents largely selected “improving profitability through higher rates” alongside “changes to terms and conditions”. Climate change also featured strongly, as did uncertainty and the potential for volatile results and increasingly deductibles.
In the written responses, which reflected these themes, there was to some extent a sense of resignation. “The big changes were made in the last renewal—our concern is now ensuring at least no further increases are made to either rates or deductibles,” one respondent said.
Others seemed to agree that what the industry needs now is stability. “Contract certainty is the main issue for us—we don’t want to be renegotiating or dealing with any more exclusions,” one said.
“We don’t want to be renegotiating or dealing with any more exclusions.”
Where are the opportunities?
Some of these issues seem to point to the trend illustrated by the second question: where respondents see opportunities. Top of the list was also improving profitability, closely followed by growing market share. Lower down the list was expanding into new lines of business, but consolidation was completely ruled out.
“We have to get back to profitability—we had too many years of losing money,” one respondent said. “It is all very well to pat ourselves on the back for making some money but we lost money for so many years, there is a lot of ground to make up.”
A number of respondents highlighted specific innovations they would like to see. One noted “the development of standard reinsurance products into multi-year structured risk transfer solutions”.
This theme of innovation shone through in other responses. “We need to consider how we can truly make a difference to clients, with value-added, rather than just how much we charge,” one said.
Another added: “One discussion point will be the trends from standard reinsurance products to structured risk transfer solutions.”
Main image: Shutterstock / SvetaZi
