Willis Re’s Dirk Spenner says cat exposed property reinsurance treaties are expected to fall on 1 January

Following slight rises at the start of this year, renewals for European catastrophe exposed property reinsurance treaties are expected to fall on 1 January 2019, Willis Re’s managing director for EMEA north and east markets told GR in Baden-Baden.

“Supply and demand are both up for European catastrophe risk business,” Dirk Spenner said. “It’s a normal loss year for European cat business, and that means a profitable underwriting year for European reinsurance.”

“We expect a flexible stance from reinsurers. Rates were slightly up in January this year, and we expect them to go down in a measured way at 1/1 next year.

“That means single digits,” he added.

Willis Re was employing an increasing amount of insurance linked securities (ILS) capacity for clients, said Spenner, including for European business.

“The vast majority of ILS capacity is being accessed in a traditional way,” said Spenner. “For us, ILS is not a fund or an alternative type of transaction. Either the ILS operates through traditional vehicles or sits behind fronted rated paper. Unrated collateralised re deals represent only a small minority of the deals we do.”

Spenner said the industry had done its job well after the 2017 loss events, mostly driven by hurricanes on the other side of the Atlantic.

“If people looked at the question marks from 2017, the sector is back to business and functioning well,” he said. “And Willis Re is doing well, too.”