Clients are leaving Monte Carlo feeling more confident about what they can get done, says Gallagher Re UK boss
Cedants’ fears have been somewhat alleviated during the Rendez-Vous de Septembre in Monte Carlo. This is according to Tom Wakefield, chief executive of Gallagher Re UK.
He said there were areas of the market where cover and price needed to be adjusted, but insisted the broker was not seeing bulk capacity being withdrawn.
“Clients are leaving Monte Carlo feeling more confident about what they can get done [at the 1 January renewals] and that’s a real positive,” he told Global Reinsurance.
There had been a lot more focus during discussions than in previous years, he revealed. At this point in the renewal season, it suggests all parties are aligned despite the challenging headwinds.
“We placed $100m of new retro limit last month and that’s the toughest part of the market,” said Wakefield. “We’re being really clear about the availability and we’re not trying to place something that we know the reinsurance community doesn’t want to write.”
“There will be capacity available for cedants as a whole at 1/1 – and there’s always going to be exceptions to the rule – but high quality cedants will always be fine. A lot of what we’re doing now is deal focused.”
While the mid-year renewals saw some cedants at 1 June struggling to secure the property catastrophe capacity they needed, those were issues that are more unique to the Florida market, thought Wakefield.
However, he acknowledged that the pressures facing the reinsurance industry are being felt across all territories, albeit to different degrees.
It is important to avoid ‘sensationalist headlines’ however. “It’s a hardening market in certain areas, but it’s not universal,” he said.
“Shareholders are asking for lower volatility and consistent returns and major clients will look to retain more.”
Here and now
“It’s important also to focus on the here and now,” continued Wakefield.
“As my colleague James Kent has been saying, it is an old-fashioned Rendez-Vous and people are being very focused.
“As a broker you need to be aligned, on point and consistent – it’s vital to feel like you’ve delivered.”
Large, well-diversified reinsurers will be in a better position to step up when it comes to deploying catastrophe capacity.
But some of the younger, more monoline players, may find it more difficult.
And in the US, inflation is already having an impact. Wakefield noted that buyers are hoping they only have to pay for inflation once.
“Demand is increasing with inflation and total insured values (TIVs) are up – that message is coming across loud and clear,” he said.
“The expectation from reinsurers is they want to get a clear view from clients on what is happening to their insured values, and we are working closely with clients on that.”
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Avoid sensationalist renewal headlines - Tom Wakefield