The world is changing and the insurance industry will have to change with it. Steve Guijarro, US chief risk officer of re/insurer Ascot Group, explains what the company is doing to achieve this.

As the world’s population grows and expands, bringing with it increased urbanisation, the subsequent impacts on the environment and on the climate are going to challenge the insurance industry.


Steve Guijarro, US chief risk officer for Ascot Group, can see all this coming. That is why, at Ascot, he and his team are working together to not only understand what the risks are, but in also how to mitigate against them.

“We don’t see these trends disappearing any time soon, especially as you pick up more of these—and I wouldn’t call them this anymore—‘secondary perils’,” said Guijarro (pictured).

“I think they’re just severe, other weather events like convective storms, hail, and winter storms. They’re going to become more of the norm, especially as we grow as a society.”

There are, going to be more zones that are more exposed to these types of events, explained Guijarro. One of the issues, he sees, is the increasing amount of urbanisation directed towards coastal areas.

“This is going to lead to degradation of the natural barrier defenses, which increases the chances of flooding or of wildfires,” Guijarro said. “We’re also going into areas that have been uninhabitable before now because of those same wildfires. So these things are going to come and they’re going to keep on coming.”

He continued: “The best thing is to be proactive. One of the ways we do it is to go back to Risk Management 101, and that is to really manage our limits, deployment, aggregation, and terms and conditions.

”It’s the one thing that our CEO states all the time: ‘no big bets’. That’s the DNA at Ascot in that we manage the limit deployment and make sure that we’re not taking too big of a bite at any single risk.”

One question that arises naturally is how to manage different types of peril. And, looking at it through the perspective of accumulation risk, how do things change in terms of the actual risks on the ground?

“I think they’ll look at how they did this before and change things,” said Guijarro. “There’s a lot of uncertainty with where the weather patterns come from. Something like flooding tends to be where the storms are, how close your risk is to the shorelines, and the shapes of the turns the storm takes.”

He added: “The exposures don’t behave exactly the same, but the way you look at and manage them is very similar. You look not only at the broad aggregations, but also at your minutiae aggregations. You also look at the quality of the risk that you’re working with. And then you partner with insurers that have that same loss-preventative mindset and who are looking to protect their exposures appropriately.”

Ascot is in the space in both insurance and reinsurance underwriting business.

“It’s probably a little different when you’re on the insurance side,” he said. “You’re probably more focused on some of those loss preventative measures that your insureds have. We’ve invested pretty heavily in resources around loss control, and we’ve hired talent that’s also very strong in the loss-control space.”

He went on: “We work with our insureds to ensure that they’re better positioned. When you’re in the reinsurance space, you have less direct contact with the insureds, but you still want to manage your exposures. That’s when the terms and conditions really apply. Although you use them as well with insurance, they’re still your biggest lever in the reinsurance space.”

Guijarro emphasised that the reinsurance market is in a good position in 2024, with strong profitability and pricing at recent renewals.

As a company, Guijarro says Ascot is looking to grow its reinsurance book appropriately, but will maintain its current appetite for cat risk at the current pricing levels. This will be done by looking at the segment through the prism of the entire group.

“You want to write the business that’s going to give you the best bang for your buck,” he said. “And there are certain products in the reinsurance space that are showing good risk returns. So we’re going to grow those and shrink in other areas, this is what Ascot is well known for good cycle management.”