The smorgasbord of life in a hard market
“Change and new things are everywhere.”
Soft markets are dull and repetitive: death by a thousand cuts for underwriters; a slow march towards improved pricing and terms and conditions for cedants; life is too easy for the brokers.
There is always the hope of real change on the horizon but also the fear of the pain needed to facilitate that change. But mostly, year after year, little changes. Conference conversations are repeated many times, and individuals question whether the cyclical nature of the market is no more.
Hard markets are the opposite—in every way. They are colourful: filled with energy, vibrancy, shock headlines, nerves—and very real change. Underwriters regain their swagger; cedants start to look unsure; brokers prosper or fail on their ability to handle the market.
And most exciting of all, new things enter the market: new companies, capital, structures, leaders. For those who like the newness of news it is the best of times.
This issue has a fair sprinkling of that new news—several examples of what makes the market colourful right now.
Seeing new reinsurers form on Bermuda is always exciting—it reminds everyone of the entrepreneurial nature of this industry, and of its importance. Were it not for such innovation, some very important parts of the global economy would struggle to function.
Conduit Re is a fantastic example of that. Of all the so-called Class of 2020, it is the only reinsurer to have completed an initial public offering—so far. Led by two industry veterans it epitomises the spirit of the industry and its ability to match the needs of investors and insurers so quickly and efficiently—despite the complexity of the risks it deals with.
Fenchurch and Partners is a different kettle of fish. Eyeing the opportunity in dislocation, new brokers also launch in hard markets. In this case, led by another industry stalwart, the company plans to set itself apart through the use of technology and data. Not only might that mean a better understanding of risk, it also negates the need to travel as much. This will give the company more time to ponder the “weird and wonderful” things the company has said it will do.
Then there is the innovation intended by incumbent players. We have two such examples in this issue: AmericanAg is planning international expansion and the executive charged with achieving it speaks candidly about what that means.
Equally, AM RE has launched a new cyber offering, and the executive heading that initiative tells us why.
All this is exciting, colourful stuff, but it is underpinned by modern issues. This magazine features two excellent panel discussions covering the use of technology in claims departments and exposure management, respectively. That is the future—come hard or soft market, the battle lines will increasingly be drawn in the realm of technology.
We also discuss how companies can and should handle cyber—the most modern of risks.
Spinning out from that theme is yet another panel discussion examining investor sentiment towards insurtech, which is showing no sign of cooling down. Maybe investors are becoming more discerning, but with so much at stake in a world that has pivoted to digital in the past 12 months, the demand remains as hot as it has ever been.
This is just a snapshot of this issue of Intelligent Insurer Review. Change and new things are everywhere, and in that theme, remember you can watch much of this content on our sister platform the Re/insurance Lounge. Look out for the links and enjoy.
Wyn Jenkins is managing editor of the Newton Media insurance group
Image: shutterstock.com / stockphoto-graf