Discipline and limit management become key as headwinds blow
After almost three years of tailwinds, some headwinds are now emerging for reinsurers, says Markel Re’s Bahr.
After almost three years of tailwinds which culminated in significant rate increases across many lines of business, conditions are now changing in the reinsurance market. Some headwinds are now emerging for reinsurers, and this means discipline and limit management will become key.
That is how Don Bahr, president of Markel Global Reinsurance since the start of 2023 when he took the reins from Jed Rhoads, characterises the market conditions he is seeing. He stresses that market dynamics broadly remain positive for reinsurers, but they must also continue to behave as rationally now as they have for the past three years.
“Our global reinsurance division benefited strongly from tailwinds in 2021/22 and maybe even early into 2023. We saw significant rate increases, particularly in the casualty lines. But those tailwinds are starting to wane, stop, or in some cases, such as directors & officers, liability and cyber, hit some headwinds and the market is seeing rate decreases,” he said.
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Clarity of coverage key to cat, but rates must also rise
Ariel Re is committed to catastrophe underwriting at the right price and terms.
Catastrophe reinsurance rates need to increase outside the US because of the increased frequency and severity of catastrophes, underwriters from Bermuda-based Ariel Re say. But the picture globally is nuanced: Joel Willens and Tom Orton, senior underwriters at Ariel Re, told Monte Carlo Today that the reinsurer remains in the market for catastrophe reinsurance even as some of its competitors are reducing their exposure—provided the rate and terms and conditions are sound.
