Asian insurance market, especially the Indian market - are considered to be "the new El-Dorado" of the global re/insurance market, with rapidly expanding markets and an dynamic environment: "Indian P&C re/insurance markets are expected to grow at a pace of 15% per annum", according to Victor PEIGNET, CEO, Global P&C, SCOR SE. The French -based reinsurer setted-up its Indian branch in 2016, after the authorisation from the local market authority - IRDAI. India's re/insurance market has become more attractive for global companies following the relaxation of regulatory requirements, and lately, "big names" in the industry entered the market by opening branches: GEN Re, SCOR, Lloyd's of London, MUNICH Re, SWISS Re, Reinsurance Group of America (RGA), HANNOVER Re, XL Catlin and others.
After the successfully USD 1.75 billion IPO , Indian reinsurer GIC Re is considering to extend its activity in Latin America by opening a subsidiary in Brazil, to establish a syndicate at Lloyds of London, to open a office in China and to expand its relations with insurers in the United States.
In a press conference, MUNICH Re Board Member Hermann POHLCHRISTOPH said that the cyber insurance market is very attractive and that MUNICH Re had written about USD 127 million in GWP in primary insurance and about USD 136 million in reinsurance. At the same time, the German reinsurer representative said that, globally about 80-90% of total cyber insurance premiums are written in United States, because of the requirements on data protection & security.
Cyber risks exposure is growing at a level which could be considered dangerous. According to a report released by reinsurance broker CAPSICUM Re, four factors could change the dynamics of the cyber insurance market: increasing regulatory pressure; frequency of cyber attacks; a lack of uniform implementation of cyber exclusions; changes in reinsurer risk appetite for cyber following recent nat cat losses.
Last month, Japanese insurer Sompo Holdings said it has agreed to sell British unit Canopius to private equity consortium led by Centerbridge Partners for USD 952 million. The Canopius representatives said after the transaction completes next year, "the company will be very seamless for European clients" (Toby ORROW, Head of International Treaty). At the same time, Thierry PELEGRIN, Head of Continental Europe told Reactions that his firs priority is to "diversify our business geographically, growing the share of continental European markets".
Hurrincanes Maria, Irma and Harvey allows reinsurers to stop the decline in rates for the first time in a decade, according to the third quarter catastrophe losses report released by S&P. Thus, prior the hurricanes and earthquakes, S&P expected a 0-5% decline in reinsurance tarrifs, but following the events it has reversed its view estimating a rate increase of 0-5% at January 1 renewals.
Despite the frequency of natural disasters has continued to increase, the real cost per event has been declining since 1970, according to a PwC analysis, wrote Baden-Baden Today. "But with more disasters being recorded, the total cost of damages continues to climb". According to the analysis, the downward trend in cost per disaster may be driven by preventive measures, such as early warning systems for severe weather.
As a result of the costliest quarter for the global re/insurance industry in its history, Bernstein analysts expects US nat cat rates to increase by an average of 10%, and US commercial property to go up by about 5%. Practically, these events reinforced the reinsurers' position to increase their tariffs, and many of them pointed out that US rate increases could spread to Europe - a market where windstorm-exposed business prices have fallen by 40% since 2013.
At the Intelligent Insurer - S&P Global Ratings Roundtable, the re/insurance market representatives pointed out the roles of the Blockchain technology, insurtech and new technologies for the industry: "Blockchain technology will change our industry to a similar extend as the move from dial phones to smartphones", said Franz-Josef HAHN, CEO, PEAK Requoted by Baden-Baden Today. At the same time, David FLANDRO, Global Head of Analytics, JLT Re emphasised that "insurtech can help shave off a point of the combined ratios, this would be amazing. On the premium side, insurtech will help to find new growth opportunities". On the other hand, Frank REICHELT, Swiss Re Market Executive, Germany & Nordics said that for him "insurtech is synonymous with reinventing the insurance industry".
Regional reinsurers remain undiminished in their importance, according to Fuad KULIYEV, CEO of Az Re: "For all regional reinsurers the biggest opportunities lie in legal and regulatory changes where they have advance warning and time to develop their products before the rest of the market. Also start-up insurers are more cosily understood' locally and can gain access to specific lines of business with the help of local reinsurer", CEO of Az Re told to Baden-Baden Today.