The outlook among delegates who attended the 2009 Reinsurance Rendez-Vous in Monte Carlo was as sunny as the glorious weather there. The mood is stable, even optimistic. Reinsurers have recovered much of the capital they lost in the financial crisis, and the first half of the hurricane season has been benign. If it continues that way, many reinsurers can look forward to excellent 2009 results.
There are some clouds on the horizon, however. Though rates are higher in some lines, the widely predicted hard market has materialised only partially. Casualty rates are seen as too low, especially given the looming threat of inflation, which would push up costs of future claims. Consolidation continues to fascinate the industry. A few months ago, Aon Benfield’s chief executive Andrew Appel remarked that there was a big opportunity for reinsurers to move, through mergers, into the top tier. Since then, PartnerRe has merged with Paris Re, and Validus has closed its hard-fought merger with IPC.
Monte Carlo was rife with rumours of further mergers, with a possible three-way deal between Ariel Re, Montpelier Re and Harbor Point speculated. These three Bermudian reinsurers certainly know each other well, but many felt that this rumour was little more than cocktail party gossip.
The lunches, dinners and parties of the Rendez-Vous were as glittering as ever. The Guy Carpenter party attracted the leading names of the industry. There was some disappointment that Aon Benfield did not host its usual mega-party, but the broker’s centre on the first floor of the Café de Paris was buzzing with activity. Most of the events were held in or near the eternal triangle of the Hotel de Paris, the Hermitage hotel and Fairmont hotel, although Flagstone Re chief executive Mark Byrne’s beautiful yacht, Perseus, provided one attractive alternative venue.
All in all, the Rendez-Vous was a success. Some criticise Monte Carlo for being too far in advance of the 1 January renewals to enable serious business negotiations. But in an industry in which personal contact and trust is everything, it provides an opportunity, in a stunning location, to meet old friends and develop new ones.
See you there again next year.