Welcome to Baden-Baden Today
This year’s Baden-Baden Reinsurance conference may not be going ahead, as a result of COVID-19 restrictions, but reinsurance professionals are still keen to discuss the hardening market, low interest rates and many of the other market changes wrought by the pandemic.
In lieu of the physical event, Intelligent Insurer has been attending virtual industry events, holding our own virtual discussions—available on the Re/insurance Lounge—and interviewing senior industry executives.
With so much going on around what would have been Baden-Baden week, we are publishing our regular newsletter Baden-Baden Today, which is usually distributed live at the event.
In its pages, readers will find insight and news from industry leaders who would otherwise have attended the event. As in previous years, we endeavour to bring our readers high level market insights in these unprecedented times.
Claire Churchard, deputy editor, Intelligent Insurer
A sneak preview: more exclusive content and interviews inside
SCOR in strategic shift to increase US and UK presence as market becomes ‘more disciplined’
Emerging markets also offer further growth potential as SCOR restructures for its ‘fast-growth markets’, Umberto Gavazzi told Baden-Baden Today.
SCOR is set to up its game in the US and UK markets in a shift of strategy that has previously seen the French headquartered reinsurer voluntarily keep a relatively low profile in these markets.
Umberto Gavazzi, deputy chief executive officer of reinsurance business at SCOR Global P&C, told Baden-Baden Today that the change in focus had come as the reinsurer sees opportunities to grow in these large and significant markets as pricing has become “more disciplined”.
“Over time we voluntarily kept our presence in the UK and the US underweight compared to our worldwide market share. That was because these markets are super complex, and that’s fine, but economic conditions were not exactly where we would have liked them to be, so we adopted a very prudent approach in both the US and the UK,” Gavazzi explained.
He said that the reinsurer has a presence in these markets and has grown there before, but added: “We don’t enjoy the position that we have in other mature markets, for instance in Europe, Japan, and Australia.”
Explaining the shift in strategy, he said: “Now that circumstances are improving—direct and primary conditions have been improving since last year, and the reinsurance market is becoming more disciplined—we think we will pick up on those two markets.
“With these markets being so large, even a relatively modest growth will contribute quite a bit on our overall plan.”
A sneak preview: more exclusive content and interviews inside
A sneak preview: more exclusive content and interviews inside
Aon–Willis tie can fill ‘innovation gap’ created by COVID-19
Rates are increasing, but so are the challenges clients face, and intermediaries in particular have a duty to help companies navigate these challenges, Aon’s president Eric Andersen told Baden-Baden Today.
The re/insurance markets and society as a whole face a myriad of challenges which are almost unprecedented in their complexity and disruptive nature. But intermediaries in particular have a duty to help companies navigate these challenges.
That is the message from Eric Andersen, president and member of the global executive committee of Aon. He highlighted just how many factors have come together to create unprecedented market conditions, and while this means rates will increase it also means clients need help.
“Market conditions are very volatile at the moment due to several factors, including increased natural catastrophes, low interest rates, social inflation and adverse development of prior losses, which are all affecting the profitability of the market,” Andersen said.
“The COVID-19 pandemic has put additional pressure on the insurance market to a degree I have not seen in quite some time. It is not necessarily because of the magnitude of losses that have occurred but because of the complexity of challenges it created for businesses, communities, and individuals.”
