Optimism emerges among reinsurance CEOs
Optimism is emerging in the reinsurance industry as pricing declines slow and CEOs see opportunities for growth.
That is PwC’s take from the Bermuda Reinsurance conference, sponsored by the professional-services firm in conjunction with S&P Global Ratings, which attracted more than 270 insurance industry professionals to the Hamilton Princess last week.
Matthew Britten, PwC Bermuda insurance partner, said: “I think what I heard on Tuesday was an increased level of optimism driven by a number of factors including; that despite prolonged tough conditions the market as a whole has remained rational, that reinsurers continue to innovate and search out new opportunities to serve their clients, that investors continue to view the reinsurance asset classes as attractive, and, specifically for the traditional reinsurers, the continued value and importance of rated balance sheets to reinsurance buyers.”
Arthur Wightman, PwC Bermuda leader and regional insurance and markets leader, said: “I stated last year that Bermuda is the seedbed of innovation and adaptability and since then this marketplace continues to drive innovation on the world stage.
“While most reinsurers have embraced change to support incremental innovation, bigger breakthroughs are necessary to compete with the new technologies and business models that are disrupting the industry.
“Technology can radically eliminate waste and enhance underwriting; reinsurance can catalyse the reduction of the protection gap; disintermediation benefits customers and investors alike; strategic cost reduction must trump incremental savings; and diversity will improve returns and is close to being a silver bullet for innovation.”
Speaking during the conference’s CEO panel, Kevin O’Donnell, chief executive officer of RenaissanceRe Holdings Ltd, said: “I do see green shoots of growth both for making the pie bigger and for each of us to be more efficient to attract more risk like cyber to our market.”
CEOs on the panel said they were pleased with the progress in the rate environment — which may have reached a bottom. Potential growth areas cited included mortgage risk, cyber, and closing the insurance gap.
Looking forward to 2017, CEOs said it’s going to be a tough year but also one where the reinsurance market is “very well poised for success”.