Monte Carlo Reinsurance Rendezvous 2015

monte_carlo_reinsurance_rendezvousThe 2015 Monte Carlo Reinsurance Rendezvous is the 59th time that the reinsurance, insurance and insurance-linked securities (ILS) world has traveled to the south of France to discuss prospects for the next major renewal season.

Since 1957 reinsurers and their clients have met in the sun (and occasionally rain) in Monte Carlo at this event and as you’d expect the industry publishes a significant amount of content, press releases and reports at this time.

This page details all of our Monte Carlo Reinsurance Rendez-vous 2015 covering, including the pre-Monte reports from rating agencies, media briefings from brokers and reinsurers, as well as coverage of any insightful reports or newsworthy highlights from during the event itself.

All of our coverage is listed in chronological order, based on the date we published it, with the most recent reporting on the reinsurance market, insurance-linked securities (ILS) and alternative reinsurance capital at the top.

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The latest:

ILS Funds taking a “discerning view” to risks in Europe: Willis Re
September 15th, 2015 – Insurance-linked securities (ILS) fund managers are taking a “discerning view” to underwriting risks in Europe, as rate decreases have prevailed and investment managers seek to ensure that investor return requirements are maintained, according to reinsurance broker Willis Re.

More insurance run-off and ILS investor initiatives expected: PwC
September 15th, 2015 – Capital markets and ILS investors will increasingly look to partner with run-off managers, in order to access the returns of non-life run-off insurance or reinsurance portfolios, according to consultancy firm PwC.

Reinsurance market’s capital structure transformed: JLT Re
September 15th, 2015 – New institutional and third-party capital entities augmenting the global reinsurance market’s capacity at a time of persistent benign loss activity has transformed the sector’s capital structure, but developments at mid-year renewals could signal change is near, according to JLT Re.

ILS 2020: Bigger, converged, cheaper, more liquid, tradable & innovative
September 15th, 2015 – Executives from the insurance-linked securities (ILS), reinsurance and institutional investments space, all agreed that in 2020 the alternative capital market and ILS will be bigger, fully converged, cheaper, more liquid and tradable and more innovative than ever.

Vario non-cat ILS partnership a key innovation for Guy Carpenter
September 15th, 2015 – Guy Carpenter firmly threw its hat into the insurance-linked strategies ring this week, saying that the partnership announced last week between the reinsurance broker and Vario Partners, forming a non-catastrophe risk ILS vehicle, is a key innovation and initiative for the broker.

Entire risk transfer network needed to close protection gap: Swiss Re
September 14th, 2015 – Challenges in the global insurance and reinsurance industry have caused firms to adapt and search for returns in an intensely competitive environment, but an industry-wide effort to bridge the protection gap signals vast growth opportunities for risk transfer market participants, says Swiss Re.

Gap between reinsurance market tiers is widening: S&P
September 14th, 2015 – Differing grades of reinsurance “culling” among cedants signals a growing divergence between Tier 1 and Tier 2 reinsurers as strategic partnerships and track record trump capacity, according to Standard & Poor’s (S&P).

Risk sharing with pension funds ups price competitiveness: Munich Re
September 14th, 2015 – The sharing of reinsurance underwriting risks with capital markets investors such as pension funds is seen as a “key development area” at the world’s largest reinsurer Munich Re, as it looks to embrace new business models.

Alternative capital can be your friend, at the right time: Brian Duperreault
September 14th, 2015 – Alternative reinsurance capital has “got to be in our future at some point” according to Hamilton Insurance Group CEO Brian Duperreault, but the time has to be right and different forms of capital need to be deployed in the right way and with the right motivations, he told Artemis.

Cyber risk needs hybrid traditional & ILS reinsurance solutions: PwC
September 14th, 2015 – The massive exposures from cyber risk will eventually need to be dealt with by the insurance and reinsurance market with a hybrid approach, creating reinsurance products that leverage both traditional and capital market or ILS practices, according to PwC.

It’s not “business as usual” in reinsurance: Jerrowek, Munich Re
September 13th, 2015 – While performance remains “pretty good” for many players in the global reinsurance and insurance market, it is no longer “business as usual” according to Torsten Jeworrek, member of the board at the world’s largest reinsurer Munich Re.

Reinsurance demand to increase, market’s not perma-soft: Aon Benfield
September 13th, 2015 – Demand for reinsurance capacity is set to accelerate, but conditions will remain challenging, according to Aon Benfield. However, while opportunities for growth still exist, the broker does not see the market as being in a permanent softened state but does expect the cycle to be different.

ILS & collateralised share of U.S. reinsurance programs growing: Willis Re
September 13th, 2015 – ILS and collateralised markets are growing their share of U.S. property catastrophe reinsurance programs, at both national and regional level, as the capital markets continues to become an essential component of many insurers risk transfer arrangements, according to Willis Re.

Tokio Millennium Re launches Capital Solutions unit, increases ILS focus
September 13th, 2015 – Tokio Millennium Re, the global reinsurance operations of Tokio Marine & Nichido Fire Insurance Co., Ltd., is increasing its focus on ILS business and advancing its partnership with the capital markets, with the launch of a new unit named ‘Capital Solutions’.

Reinsurance; it’s all about the capital efficiency
September 13th, 2015 – It’s not just insurance-linked securities (ILS), capital markets players and investment conglomerates that can enter the reinsurance market boasting a reduced cost-of-capital and lower return requirements than incumbents. Even a traditional insurer can follow this approach.

Reinsurance sector a story of good news & bad news: Guy Carpenter
September 12th, 2015 – Reinsurance broker Guy Carpenter opened the 2015 Monte Carlo Rendez-vous with its regular and now eighth press briefing, but the news for the reinsurance underwriting community is mixed, with it being described as a “good news, bad news story.”

Natural disasters a risk to sovereign ratings, risk transfer required: S&P
September 11th, 2015 – Rare but extreme natural disasters and catastrophes can cause sovereign ratings downgrades, with the biggest impacts seen from earthquake and tropical storm simulations, making sovereign risk transfer and catastrophe insurance key, according to S&P.

Alternative capital now “firmly embedded” in reinsurance: Moody’s
September 11th, 2015 – Alternative reinsurance capital, in structures ranging from catastrophe bonds and insurance-linked securities (ILS), to sidecars and collateralized reinsurance structures, is increasingly embedded within the market, with re/insurers increasingly relying on it, according to rating agency Moody’s.

Aon Securities records new ILS & cat bond market highs
September 10th, 2015 – Aon Securities, the investment banking and capital markets unit of insurance and reinsurance broker Aon plc, has recorded a new high in its annual insurance-linked securities (ILS) market report, seeing the market at $24 billion for the first time.

Reinsurance outlook remains negative, challenges ahead: Moody’s
September 9th, 2015 – Moody’s Investors Service remains negative on the prospects for the global reinsurance industry, in its latest updated outlook today, explaining that with capacity levels still high and demand shrinking, there is an expectation that further price declines are ahead.

Convergence essential for insurance to reach the vulnerable: A.M. Best
September 9th, 2015 – The growth of the reinsurance and ILS convergence market has helped much-needed insurance protection reach vulnerable parts of the world, as public and private sector entities’ involvement in insurance-linked securities (ILS) gains momentum, reports A.M. Best.

Signs of rationality in reinsurance, as capital growth slows: Willis Re
September 9th, 2015 – There are signs that an equilibrium between reinsurance capital supply and demand may be emerging, leading broker Willis Re to suggest that the “emergence of rationality” is being seen, as capital growth in the sector slows down.

Buyers market ups use of retrocession for tail risk protection: S&P
September 9th, 2015 – Since the January 1st 2015 reinsurance renewal global reinsurers have increased their use of retrocession for tail protection across all perils, as rates declined resulting in a buyers market and the use of alternative capital and ILS structures increased, according to S&P.

Alternative reinsurance capital growth outpaces traditional: Aon Benfield
September 8th, 2015 – Alternative capital continues to grow its presence in the global reinsurance industry, rising by 6% during the first-half of 2015 to $68 billion, while traditional capacity fell by 3%, according to international reinsurer Aon Benfield.

Reinsurance price declines to continue, profitability to suffer: S&P
September 8th, 2015 – Reinsurance pricing is expected to continue to soften at the upcoming January 2016 renewal season, with S&P forecasting further declines of around -5% across the market leading to an expectation that most reinsurers will find profitability waning.

Alternative reinsurance capital to have profound, lasting effect: Fitch
September 8th, 2015 – The entry of alternative capital into the reinsurance market and the growth of ILS is not just expected to continue to disrupt the traditional market, it is expected to have a “profound and lasting effect” according to Fitch Ratings.

Convergence to dampen reinsurance & retro market cycle: A.M Best
September 7th, 2015 – The convergence market will play an important role in both risk transfer and risk mitigation for catastrophe exposures, with the result being an expected dampening of reinsurance price volatility and a flattening of the traditional market cycle, A.M. Best says.

Diversified re/insurers risk continuation of pricing pressures: Bernstein
September 7th, 2015 – As global reinsurance prices continue to soften, underwriters in the space are faced with pressures leading to a search for scale and diversification. But analysts at Bernstein have warned that firms that are highly diversified could ultimately prolong pricing pressures.

Reinsurance has an identity crisis, increasingly like ILS – S&P
September 4th, 2015 – The reinsurance market and its reinsurers are suffering from an identity crisis, increasingly borrowing from the insurance-linked securities (ILS) market as they behave more like ILS players and third-party capital providers, according to rating agency Standard & Poor’s.

Unconvinced by reinsurance pricing floor, declines likely at 1/1: Fitch
September 3rd, 2015 – Fitch Ratings said this morning that it is not convinced that the much discussed reinsurance pricing floor has been reached, even in property catastrophe exposures and peak lines, with further single-digit declines expected at the 1/1 January 2016 renewals.

Reinsurers’ management of catastrophe exposures diverges: S&P
September 3rd, 2015 – Global reinsurers are adopting divergent approaches to managing catastrophe exposures as market challenges, driven in part by ample capacity and a lack of significant losses persist, according to insurance and reinsurance ratings agency Standard & Poor’s (S&P).

Catastrophe bond pricing floor expected to persist: GC Securities
September 3rd, 2015 – GC Securities, the investment banking, catastrophe bond and capital markets arm of reinsurance broker Guy Carpenter, said today that it expects the catastrophe bond pricing floor, which was seen during the second-quarter, will persist for the near future.

The reinsurance market – A new structural reality: A.M. Best
September 2nd, 2015 – The reinsurance market is “operating in a new reality of abundant capacity from traditional and alternative sources” according to A.M. Best. Historically change in the reinsurance market has been said to be cyclical, but the current wave of change is thought structural in nature.

Vast capacity for Asia reinsurance market to grow: Fitch
August 28th, 2015 – Asia’s reinsurance markets have the potential and scope for strong growth as risk-awareness and demand for reinsurance coverage spikes in the region, coupled with a significant protection gap and the region’s high exposure to losses from natural catastrophes, according to Fitch Ratings.

Berkshire Hathaway copycats will pressure reinsurance pricing: S&P
August 28th, 2015 – Warren Buffett had previously bemoaned the fact that reinsurance had become a “fashionable asset class”. Now, his own business model is being blamed for creating further pressure on reinsurance prices, as new entrants look to operate with a reduced cost-of-capital.

Reinsurance M&A no panacea, but momentum to continue: S&P
August 27th, 2015 – Merger and acquisition activity among global reinsurance firms is expected to continue through the rest of 2015 and into 2016, with only the strongest expected to have the best future prospects, according to rating agency Standard & Poor’s.

Alternative reinsurance capital use in Latin America constrained: Fitch
August 27th, 2015 – The use of third-party, or alternative, capital and the expansion of insurance-linked securities (ILS), such as catastrophe bonds and collateralized reinsurance into Latin American markets is currently constrained, meaning its participation remains low in the region.

Alternative reinsurance capital can narrow protection gap: Swiss Re
August 26th, 2015 – According to an interview with global reinsurer Swiss Re’s CEO, alternative reinsurance capital is not something to be feared for the company, rather it is an essential source of capacity to help provide insurance and reinsurance for the world’s uninsured risks.

Reinsurer net investment yields down 30% in four years: S&P
August 25th, 2015 – Alongside the growth of ILS, alternative capital, the catastrophe bond and other capital market backed reinsurance capacity, the other main threat to the traditional reinsurance business model in recent years has been the steady decline in investment returns.

Reinsurance rate declines decelerate, but pressure remains: Fitch
August 25th, 2015 – The global reinsurance market shows signs that the pressure on pricing due to soft market conditions is slowing, as rate declines decelerated at the mid-year renewals, but reinsurers, despite remaining profitable, are still under pressure, according to Fitch.

Alternative reinsurance capital pressures ASEAN insurers: S&P
August 24th, 2015 – The influence of alternative reinsurance capital and growing insurance-linked securities (ILS) capacity in the global re/insurance market, is now so widely felt that even the ASEAN insurance community is feeling increased competitive pressures as a result of it.

Catastrophe bond issuance in Asia Pacific to increase: Fitch
August 21st, 2015 – As insurance and reinsurance companies in the Asia Pacific region look to strengthen resilience to disasters, there is an expectation that the catastrophe bond will increasingly feature as regional re/insurers leverage alternative sources of risk capital.

S&P warns on reinsurers protecting profits through reserve releases
August 20th, 2015 – In the current soft reinsurance market environment, some reinsurers have been relying on prudent reserving and timely releases of capital to protect or enhance their profits. But with major losses remaining absent from the market, dwindling reserves could come back to bite.

78% of insurers not feeling impact of alternative capital, A.M. Best survey
August 19th, 2015 – The insurance and reinsurance industry faces increasing interest and a growing amount of capital inflow from sources outside of the industry. This alternative capital, while having a marked impact on areas of reinsurance, is not yet felt widely by primary insurers.

ILS market growth should not be at the expense of discipline, S&P warns
August 18th, 2015 – Continued and future growth of the insurance-linked securities (ILS), catastrophe bond and alternative reinsurance capital market should not come at the expense of discipline, warns rating agency Standard & Poor’s today.

Biggest reinsurance firms putting their risk management to the test
August 18th, 2015 – It is increasingly apparent from the second-quarter results season that the largest reinsurance companies in the world will, at some stage, see their risk management practices tested, as they continue to take on increasing amounts of risk at lower pricing and with expanded terms.

2015 catastrophe bond & ILS issuance passes $6bn from 40 deals
August 17th, 2015 – Catastrophe bond and insurance-linked securities (ILS) issuance recorded in the Artemis Deal Directory has passed the $6 billion mark already in 2015, as the rapid rate of issuance and growing number of private deals helps the market maintain a near record pace.

97% of primary insurers not taking advantage of ILS: A.M. Best survey
August 11th, 2015 – Responses to insurance and reinsurance rating agency A.M. Best’s latest market survey point to a huge opportunity for the insurance-linked securities (ILS) and catastrophe bond market, with only 3% of respondents noting any use of ILS capacity in recent times.

Rating agencies skeptical on PartnerRe’s standalone reinsurance future
August 4th, 2015 – Reinsurance firm PartnerRe has been downgraded by A.M. Best, who cites a lack of diversification in its business without the AXIS deal. It has also been given a negative outlook by S&P, who said the reinsurer has been distracted by the prolonged back and forth of M&A activity.

An uncertain future for Bermudian re/insurers: Fitch
August 3rd, 2015 – The host of market pressures in the global insurance and reinsurance market, exacerbated by market consolidation, ample capacity and impending Solvency II requirements, presents a challenging and uncertain future for Bermudian entities, according to Fitch Ratings.

Don’t lose sight of the many opportunities in reinsurance: Swiss Re CEO
July 30th, 2015 – One of the most encouraging things to come out of the second-quarter results round so far, is the emergence of some clear messaging from reinsurance industry senior executives that opportunities for growth are available, should you be willing to identify and embrace them.

Something we’ve missed? Contact us and we can add it.

All of Artemis’ coverage from the 2014 Monte Carlo Rendezvous can be found here.