Reinsurance showing ‘greater willingness to be innovative’ – BMS Re’s Dudley

The reinsurance market has showcased “a greater willingness to be innovative” around this year’s RVS in Monte Carlo – an important step change if the sector is “going to avoid a classic soft market cycle”, according to Richard Dudley, chief broking officer at BMS Group.

Speaking exclusively to Global Reinsurance, Dudley explained that although base products have not necessarily changed dramatically, improved data usage and understanding has unlocked how “innovative reinsurance solutions” can be applied to “an insurer’s balance sheet”.

He said: “One of the interesting trends [emerging] this year has been a greater willingness to be innovative in the reinsurance world.

“Our world, in some ways, doesn’t change a great deal over the years. We have pro rata, excess of loss, aggregate cover, stop losses, parametrics, whatever it might be. So, all those things, they haven’t changed, but the way they can be used [has changed] – the ability now that we have to leverage data and to be much smarter about how [to] apply innovative reinsurance solutions to an insurer’s balance sheet. There’s a bit more scope for that these days.

“My hope is that the reinsurance market is willing to innovate more across the board because if it does not, it is just going to be a real squeezed negotiation between insurers [that] are suffering quite heavily [and] some of the [reinsurance] players.

“In property, for example, north American property [insurance] rates are falling significantly quicker than anything that’s happening in reinsurance. So, there’ll be a squeeze between cedents and their reinsurers.

“If we’re going to avoid a classic soft market cycle, we need to be a bit more innovative.”

As to what this innovation looks like in practical terms, Dudley wants to see “big buyers of reinsurance” break the mould of purchasing “the same thing year after year” or taking out “similar combinations”.

He explained: “There are so many big buyers of reinsurance [that] tend to buy the same thing year after year. They buy a big marine energy programme, they buy a big property cat programme, they might buy some credit share. A lot of people will buy similar combinations.

“For me, I’d like to see more people thinking multiclass. I’d like to see more people thinking multiyear. I’d like to see people thinking about the stop loss concept and how that can be more smartly applied in changing market dynamics. That’s what I really hope to see.

“We’ve already seen a small number of frequency covers come back to the marketplace during the year. This year, we’re probably going to see some more.”

Re/insurance boundary blurring

Dudley further believes that another innovative opportunity arising in the reinsurance sector comes from “a real crossover happening between insurers and reinsurers”.

His view is that insurers operating in the primary market are increasingly adopting the traditional reinsurance model of portfolio risk management – for example, through tools such as broker facilities or MGA capacity. He thinks “reinsurers just need to be conscious of that” changing dynamic.

He continued: “I would like to see the reinsurance market really obviously being aware of the challenges in the insurance market and also understanding their role in managing portfolios of risk. That’s what reinsurers do most of the time. Actually, the insurers are beginning to do the same thing.

“Portfolio underwriting was always the preserve of the reinsurance market – and now it isn’t.”

Dudley additionally feels that insurers’ use of technology is something reinsurers could tap into more.

“I’m a big believer that trends in the insurance world ultimately find themselves into the reinsurance world, [including] more of a use of tech,” he added.

“There’s a lot of new tech firms in our industry [that] are helping us to transact business much more efficiently, to manage data much more quickly, to transact greater volumes, more rapidly. And that’s probably more [of] an insurance thing than a reinsurance thing.

“[What] really interests me is how the use of tech drives the ability to manage a portfolio of risks and, therefore, that begins to blur the boundaries between insurers and reinsurers.”

Some reinsurance focused firms are even dipping their toes into primary market waters, Dudley noted – he cited Howden’s launch of a US retail broker in August 2025 as an example here.

“What’s interesting to me is the balance between insurance and reinsurance and whether we see more businesses, maybe a reinsurance only, wanting to include insurance opportunities as well – that’d be interesting,” he said.

Investing and innovating for growth

BMS Group, which has 2,000 staff overall – 300 of which are in its reinsurance arm – is putting its money where its mouth is.

“We’re certainly very keen to be seen as an innovator,” Dudley confirmed.

“Innovation is key in our DNA and that’s really where we want to go. We’ve been investing [in the business over] the last 12 months.

“We’ve recruited in our London cat and retro teams. We’ve recruited in our London-based US wholesale teams. We’ve recruited in Latin America. We’ve recruited in the US onshore, so the reinsurance business is investing.

“Our goal is growth. It’s as simple as that.”

BMS Re, the firm’s reinsurance arm, currently handles around $10bn (£7.4bn) in gross written premium. Although Dudley said there were no set financial metrics against the division’s growth, he confirmed “we know where we want to grow”.

He continued: “We want to scale our business in Bermuda. We’ve invested heavily in London. We’ll continue to do so. Those two elements are important to us. And one reason they’re really important is because they’re significantly sub scale compared to our US business. We need to catch up with our US businesses.

“Secondly, we have a very significant inwards flow of insurance business into the London market, in particular. That gives us a great perspective on insurance inwards and what, therefore, their insurance outwards requirements are. So, we hope that will lead to [a] growth opportunity for us.”

Alongside using reinsurance capacity to support MGAs and remaining open minded to possible M&A, Dudley also ringfenced Howden’s new retail broker in the US as a potential “growth opportunity” for BMS Group.

This is because this development could “cause [a] moving around [of] business in [the] wholesale and specialty [arena] in London because US retail brokers use a selection of different wholesalers in London”.

He added: “We are expecting there to be some movement of business as a result of that, which we think will be a growth opportunity for us too.”