Welcome to Monte Carlo Today

The Rendez-Vous de Septembre in Monte Carlo may have been cancelled for the first time—due to COVID-19—but the re/insurance industry has long and proud traditions. For more than 60 years, executives have travelled to Monte Carlo in September to start the process of negotiating the year-end renewals.

Despite there being no event, that same ritual will take place this year—in a virtual setting.

Press conferences and roundtables are going ahead; and senior executives are giving interviews putting their markers down in terms of their expectations for changes in rates and terms and conditions.

On this basis, we are publishing our Monte Carlo newsletter Monte Carlo Today—usually distributed live at the event—as we have always done.

We will interview senior executives, attend the virtual events and ensure our readers have their finger on the pulse of the industry at this critical and unprecedented time.

We hope you find the content in the following pages as useful and insightful as you have always done. We miss seeing the industry face to face as well, but we will still do what we have always done: report on the most important events, news stories, opinions and debates to keep our readers informed and ahead of the game as they make decisions.

Wyn Jenkins, managing editor, Intelligent Insurer

A sneak preview: more exclusive content and interviews inside

'Fear factor’ around COVID-19 could elongate hard market, as uncertainty becomes the norm: Swiss Re

The hard market is being driven, and could be lengthened, by the uncertainty surrounding COVID-19 and the fallout for economies globally. Against this unprecedented backdrop, demand for reinsurance could also increase, Thierry Léger of Swiss Re tells Monte Carlo Today.

The continuing fallout and uncertainty created by COVID-19 is creating a “fear factor” in the re/insurance industry that has triggered the first true hard market in 20 years and could mean it will be elongated, compared with previous cycles.

That is the view of Thierry Léger, group chief underwriting officer of Swiss Re, who told Monte Carlo Today that while multiple forces—including several years of high cat losses, ever-lower interest rates, social inflation and the propensity of secondary perils—have converged to force hikes, the uncertainty around COVID-19 has been the key differentiator compared with previous years.

“For me, a true hard market is always driven by multiple factors. When 9/11 happened, that was on the back of severe winter storms in Europe, a stock market downturn and a casualty crisis—all those things combined to increase rates.

“The same is true now: a number of factors have combined. But the final catalyst was COVID-19 and the uncertainty that a pandemic brings. Rates have started to improve in recent years, but it is now clear they need to increase by a lot more—and a tidal wave of forces have emerged to force that to happen.

“For the first time in 20 years, I can feel a fear factor in the market. But as well as driving rates up, that will also make new capital considering entering the market hesitate,” Léger says.

“Investors will be seeing headlines about losses and economic downturns and, even though the barriers to entry are lower than they have ever been, they will become more hesitant.

“That could mean we are in for two or three years of a hard market before new capital flattens the cycle.”

A sneak preview: more exclusive content and interviews inside

Pool Re prepares for dynamic renewal

Insureds’ appetite for terrorism coverage is growing, but reinsurers remain supportive of Pool Re, says CEO Enoizi.

Don’t call it a hard market—just yet

Buyers set out their stalls ahead of renewals, and argue that capacity remains adequate in spite of rate hikes across the board.

A sneak preview: more exclusive content and interviews inside

Best of both worlds: UnipolRe’s unique position as industry heads for choppy renewals

As the industry grapples with hardening rates and COVID-19 disruption, Marco Sordoni of UnipolRe can offer a perspective from both sides of the fence.

As the re/insurance industry moves into its annual renewals negotiation against a backdrop of unprecedented disruption due to COVID-19 and the first hard market in almost 20 years, a question mark is emerging over whether some companies have the experience in their talent pool to handle the challenges ahead.

Even an underwriter or broker with a decade of experience in the market will never have had to negotiate severe rate hikes on programmes or have faced the possibility of being unable to place certain layers of programmes at all.

But other executives are uniquely positioned to navigate these choppy waters, not only because of the length of their careers but because of their breadth of experience.

Sordoni had worked in the reinsurance industry for almost 20 years before he joined Unipol Group in 2013. Once there, he took responsibility for its reinsurance programme, making radical changes to its structure and cutting the number of counterparties it worked with in the process.