William Jewett is confident reinsurers will not face a significant impact
While insurers acknowledge the European Commission’s objective of ensuring continued relevancy in the current market environment, many also recognise that its goal in renewing the Insurance Block Exemption Regulation (BER) is for greater clarity in how the sector can offer its clients greater and more consistent coverage.
The indication that the exemption for joint calculation, tables and studies will be renewed is an excellent sign. The ability to share risk data is critical to informed pricing and allows smaller markets to increase their participation.
Widely available risk data will allow more innovative structuring of products and policy conditions, thereby fostering a more competitive environment.
In contrast, the commission’s hesitancy to continue the BER on standard policy conditions could reduce transparency. However, it is unlikely to have a significant impact on the economic efficiency of the marketplace.
While the commission favours continuing the exemption for co-(re)insurance pools, such as terror and nuclear pools, it has indicated that this provision may be significantly redrafted.
Co-(re)insurance pools historically have proven to be a sustainable mechanism for the efficient deployment of capital for high severity exposures. Insurers now need clear guidance so that these mechanisms can continue to be used to meet economic and market demand.
William Jewett is president and chief executive officer of Endurance Worldwide Reinsurance