Brokers must manage clients’ expectations around hardening
A good reinsurance broker will have managed clients’ expectations around rate increases and changes in terms and conditions in the run up to the year-end renewal—and helped craft solutions to minimise the impact on their portfolios.
That is the view of Chihiro Maekawa, head of property and casualty—Singapore, at Miller Insurance. She said that the broker’s clients in Asia are grappling with rate increases as a result of a hardening reinsurance market globally, but most had been prepared for what was coming many months ago.
“Clients understand what is going on. We have been talking to them in depth well before the hard market started to emerge to explain that is the direction of travel for the industry. So it is less of a surprise,” Maekawa said.
“We are working then to achieve the best solutions for our clients. It is not a question of simply accepting rate increases; we will explore other solutions such as a different structure or higher retentions, for example.”
She added: “We feel that in a hard market, it is the time for brokers to differentiate themselves by getting the best deals for clients but also supporting them on our service quality, the technical expertise we have and value-added products we can offer.”
Maekawa said the extent of rate increases in Asia vary dramatically by country and line of business, but overall are less pronounced than in other parts of the world.
“It depends on the loss history of the client and that line but there is still plenty of capacity available in Asia and that has dampened things to some extent,” she said.
“It is not a question of simply accepting rate increases; we will explore other solutions.”
Chihiro Maekawa, Miller
She added that Miller, which specialises in placing facultative business from its Singapore office, is helping clients restructure their programmes where the underlying portfolio has changed.
She notes that many insureds severely hit by the pandemic have been forced to change their own business models and many need less reinsurance as a result.
“Their budget has reduced and that is replicated on the reinsurance side. It is our job to look at solutions to that where possible.”
Maekawa said that Miller’s operations in the region and those of its clients had continued almost unaffected by COVID-19. She said the transition to working remotely had been relatively smooth.
“The pandemic demonstrated the resilience of the industry,” she said.
She added that Miller had successfully retained the majority of its business in this renewal and secured some new clients. Its core strategy is to focus on growing its relationships with existing clients.
“That has worked in our favour during the pandemic and we have strengthened the majority of our relationships,” she said.
Maekawa said the main challenge the company faces at the moment remains restrictions on travel. But she remains optimistic about growth and the ability of the industry to adapt in the future.
Main image: shutterstock.com / Chaay_Tee