EDITOR’S LETTER
Adjusting to new realities
“In a year of ‘strife everywhere’ the re/insurance industry has laboured to do what it does best: to provide stability and protection.”
In this special End of Year Review edition of Intelligent Insurer the team has selected 2022’s most pivotal and interesting moments across M&A, market insights, innovation and business strategy, among many other highlights.
In a historic year, one that many people would prefer not to revisit, three words were repeated across the re/insurance industry more than most: inflation, capacity, and retention.
Inflation reached record highs, driving an already hard market to levels of hardness unseen for decades.
Market commentators predicted tricky 1/1 renewals as a result, and others warned of capacity shortages and the need for retention increases. As the four major renewal season conferences closed—in Monte Carlo, Dallas, Baden-Baden and Singapore—the market prophets appeared to be right. The proof will be in the January 1 pudding.
Two precursors to rocketing inflation were the war in Ukraine and the preceding COID-19 pandemic years that undermined global macroeconomics. Russia’s invasion of its neighbour forced civilians from their homes and shocked Europe. Energy disruption followed as Russia faced sanctions and supply chains broke down.
In 2022 the reality of climate change became truly incontrovertible. Numerous countries experienced severe cat events, from hail and wind storms to extreme flooding, heatwaves and droughts. The groaning weight of data confirming an increase in the severity and frequency of climate-related events became undeniable. In spite of this, the ability of COP27, in Egypt, and COP15, in Montreal, to spur political leaders to take action remains to be seen.
End of an era
This was also when the 70-year reign of Queen Elizabeth II, a constant in the lives of many, ended with her passing. The UK had three prime ministers in just a year and a disastrous “mini-budget” that sent the economy, and markets, reeling.
In the US, the overturning of Roe v Wade and ongoing legal efforts to hold those responsible for the deadly attack on the Capitol in Washington DC on January 6, 2021 accountable made for a febrile atmosphere.
Into this changed world Hurricane Ian, and Fiona before it, made landfall. Ian alone was estimated to have caused $60 billion insured losses as it tore across Florida, prompting comparisons with 1992’s Hurricane Andrew, another industry-changing event.
In a year of “strife everywhere” the re/insurance industry has laboured to do what it does best: to provide stability and protection. This may become trickier to deliver next year as some predict that the New Year will bring with it an even harder market than 2022’s. But alongside these challenges come opportunities, and there are plenty of people in the industry who recognise this.
We hope you find this End of Year roundup interesting and useful as we all head into another year that could prove just as eventful as this one.
Claire Churchard is senior editor of the Newton Media insurance group
Image: shutterstock.com / Sk Hasan Ali
