NEWS
NewRe cites its predictability amid uncertainty
NewRe received a flurry of enquiries for structured and alternative products at the end of last year.
NewRe received many enquiries for structured and alternative products at the end of last year, as some cedants tried to plug holes in their reinsurance programmes through innovation. And chief executive officer Thomas Braune says he expects another burst of requests this year—despite a more settled renewal.
“We received a lot of requests last year, which did present an internal challenge of resources, as cedants sought solutions,” he said. He said some deals were possible, but NewRe’s wider approach of offering certainty has been appreciated by brokers amid the turbulence.
“We have been very predictable,” he said. “We require a certain technical price that must reflect claims inflation, and we are transparent on that. But we have always requested clarity on what we cover and our appetite. We have a very clear strategy that has been welcomed.”
“We have a very clear strategy that has been welcomed.”
Thomas Braune, NewRe
Braune says NewRe’s capacity and appetite will be similar this year, with single-digit rate increases possible, depending on the line, to reflect inflation in claims. He admits things could change if a bad hurricane hits the US but stresses that would be the result of a wider market move, since it writes little business in North America.
One other consequence of such an event, he notes, is that the retrocessional market could dry up again, as happened last year when it was “available only at a high price”. He notes that NewRe has all but stopped writing retro—a reflection of its growth in traditional lines.
“We want to focus on our core clients,” he said.
The rate equation
Dirk Herrenpoth, chief underwriting officer of NewRe, added that he feels the rate increases seen last year were an “overdue reaction” by the market in the context of developing loss trends.
“We continue to support clients, but we are cautious.”
Dirk Herrenpoth, NewRe
“We have seen rate improvements, but they are in the context of the increased risk landscape.” He stressed that rate was only part of the equation: structures and wordings are equally important, he said.
While things are positive in property as a result, where NewRe has grown its book “meaningfully”, casualty is not as hard. He cites concerns in the market over inflation, social inflation and how some long-tail lines might develop. “We continue to support clients, but we are cautious,” he said.
Overall, however, assuming another bad loss event does not derail the market this year, he expects a more settled renewal with more certainty.
“Last year, many cedants were caught by surprise. This year, it should be a more orderly renewal with upwards pressure on price. We are reliable and predictable and well-positioned to grow alongside clients organically,” he concluded.
Illustration: Russell Cox