Monte Carlo Reinsurance Rendezvous 2016
The 2016 Monte Carlo Reinsurance Rendez-vous is upon us, the 60th anniversary of the reinsurance, insurance and more recently insurance-linked securities (ILS) meeting in the south of France, where market participants discuss prospects for the next major reinsurance renewal season.
Since 1957 reinsurance firms and their clients have met in the sun (and occasionally rain) in Monte Carlo, Monaco at the Rendezvous event making it a busy time for media reports and news.
This page lists all of our Monte Carlo Reinsurance Rendez-vous 2016 covering, including some of the pre-Monte Carlo RVS reports from rating agencies, media briefings from brokers and reinsurers, coverage of insightful reports or newsworthy highlights from the event itself and any interviews we conduct.
Our Monte Carlo Rendez-vous 2016 coverage is listed in chronological order, based on date published, with the most recent reporting at the top.
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Interview – Why ILS managers are staying firm on rates: Michael Stahel, LGT
September 26th, 2016 – Michael Stahel, Partner and Portfolio Manager at LGT ILS Partners describes how tearing down the wall between the reinsurance and capital markets has fundamentally altered the reinsurance cycle.
Interview – Unwillingness to pay “one of the big myths” of the ILS market: Craig Wenzel, XL Catlin
September 20th, 2016 – Craig Wenzel, Senior Vice President, Capital Markets, XL Catlin does not understand why there is any concern amongst cedants that alternative reinsurance structures could fail to payout in the event of a major loss.
Catastrophe bonds & ILS not a reinsurance disruptor: Dennis Kessler
September 20th, 2016 – The rise of catastrophe bonds and insurance-linked securities (ILS) issuance in the global reinsurance marketplace is not a market disruptor, but supportive and supplementary to the global reinsurance market, according to SCOR’s Dennis Kessler.
Despite falling returns equity investors unlikely to exit reinsurance: S&P
September 20th, 2016 – The majority of reinsurance equity investors are likely to remain in the sector despite persistent rate declines as returns continue to be more favourable than other industry sectors, according to Standard & Poor’s (S&P).
Interview – Alternative capital may shorten the reinsurance cycle: Monnier, Swiss Re
September 16th, 2016 – The influence of alternative capacity on the peaks and troughs of the underwriting cycle have been over exaggerated, according to Jean-Louis Monnier, Co-Head of ILS at Swiss Re Capital Markets and global head of ILS structuring.
ILS funds to be increasingly influential in reinsurance: A.M. Best
September 16th, 2016 – ILS fund managers will experience ongoing growth and become increasingly influential in the global reinsurance market, rating agency A.M. Best expects, with more collateralised reinsurance placements for non-peak risks likely to be ceded to the capital markets and ongoing growth elsewhere in ILS.
Interview – Life & Solvency II capital deals a focus for Secquaero: Dirk Lohmann
September 15th, 2016 – Growing in life insurance risk as an asset class and helping re/insurers with their Solvency II capital needs by delivering structured products are both areas of focus for the future at Secquaero Advisors AG, according to CEO Dirk Lohmann.
January reinsurance renewal rates expected “below stable”: KBW
September 15th, 2016 – The January 2017 reinsurance renewals are likely to see pricing and rates coming in below the stable levels that have been forecast by a number of large re/insurers, according to analysts at KBW reflecting on what they learned at the 2016 Monte Carlo Reinsurance Rendez-vous.
Bottom of the soft market is very close, or already here: Swiss Re CUO
September 15th, 2016 – The reinsurance market has been in a softening phase for quite some time now, driving discussions about the bottom of the current cycle. And according to Swiss Re’s Matthias Weber, the bottom is either very near, or it’s already here.
Interview – Reinsurance rate softening to continue, ILS to grow influence: S&P execs
September 15th, 2016 – Executives from global ratings agency Standard & Poor’s have underlined the growing influence of ILS capital in the global reinsurance landscape, a marketplace where ROEs are expected to continue to deteriorate as headwinds persist.
Quantitative reinsurance underwriting supports price discipline: A.M. Best
September 15th, 2016 – There is evidence that the “very quantitative” approach of the reinsurance and ILS market to underwriting peak catastrophe risk business is helping to support pricing discipline, according to rating agency A.M. Best.
ILS growth to continue at a steady pace: Munich Re’s Blunck
September 14th, 2016 – At the annual meeting of the reinsurance industry in Monte Carlo, Thomas Blunck, a member of the Munich Re board of management, said that he expects the insurance-linked securities (ILS) space to continue on its current development path.
Post-loss reinsurance rate rises will be difficult to sustain: Priebe, Guy Carpenter
September 14th, 2016 – In the future the reinsurance market will find it increasingly difficult to sustain price increases after major losses, as the ILS sector has made contingency plans to inflow new capital rapidly post-event, according to Guy Carpenter Vice Chairman David Priebe.
Reinsurers only profitable due to low catastrophe experience: S&P
September 14th, 2016 – Standard & Poor’s notes that were it not for the benign catastrophe loss experience of recent years and higher reserve releases reinsurers’ return on capital would have failed to exceed cost of capital levels in 2015 and so far in 2016, suggesting that a truly soft market is nearing.
Interview – The bottom is in sight: Kathleen Faries, Tokio Millennium Re
September 14th, 2016 – If RoEs in the reinsurance industry continue to decline investors will “at some point question putting their capital into this space… but luckily we’re not quite there yet”, according to Kathleen Faries, Head of Bermuda at Tokyo Millennium Re, the global reinsurance operations of Tokyo Marine & Nichido Fire Insurance Company.
ILS provides Europe’s major reinsurers with underwriting flexibility: Fitch
September 14th, 2016 – The four major European reinsurers continue to use the features and capacity of the insurance-linked securities (ILS) space to transfer peak risks. Utilising alternative capital provides the firms with additional underwriting flexibility and is supportive of strong risk management, according to Fitch Ratings.
Alternative capital & ILS has “uberized” insurance & reinsurance
September 13th, 2016 – The innovatively generated, and expanding source of alternative reinsurance capital is a game changer that has uberized the insurance and reinsurance industry, according to industry leaders speaking at the 2016 Monte Carlo Reinsurance Rendezvous.
Capital markets make sense for certain risks & here to stay: Swiss Re CEO
September 13th, 2016 – The securitisation of risks via third-party backed reinsurance capital “makes perfect sense” for natural catastrophe risks owing to the underinsurance of peak risks, and is an important risk transfer tool that is most likely here to stay, according to Christian Mumenthaler, the Chief Executive Officer (CEO) of Swiss Re.
ILS demand & reinsurance rate stabilisation expected: Hannover Re
September 13th, 2016 – Global reinsurance giant Hannover Re expects the demand for insurance-linked securities (ILS) structures to grow in the coming years, and that reinsurance prices will show greater stability at January 1st 2017.
Industry needs to get better at selling Cat: Dominic Christian, Aon Benfield
September 13th, 2016 – The reinsurance industry needs to get better at promoting the value of its catastrophe products to buyers, thinks Dominic Christian, Executive Chairman, Aon Benfield International. Property catastrophe reinsurance plays a vital societal role as well as generating significant premiums for the industry, he told Artemis ahead of the Rendez-Vous de Septembre in Monte Carlo.
Turn in the market “will be great for cat bond issuers” – David Flandro
September 13th, 2016 – When the global reinsurance market begins to turn from its softening cycle, issuers of catastrophe bonds will benefit from an increased demand for cover, according to JLT Re’s David Flandro.
ILS capital could help to make run-off market more efficient: PwC
September 13th, 2016 – The insurance and reinsurance run-off, or legacy transactions market has continued its growth path so far in 2016, a trend that is expected to continue. And as buyers look to access new capital providers it’s expected that pension funds and ILS vehicles will play an increasing role in the market, according to PwC.
Torsten Jeworrek, Munich Re on reinsurance & ILS market trends
September 12th, 2016 – While the long-term impact of alternative reinsurance capital and ILS on catastrophe re/insurance profits remains unclear, reinsurers such as Munich Re have an increasingly ability to cooperate with alternative capital to their own benefit, according to Torsten Jeworrek.
ILS leveling out (for now), but that’s a sign of a healthy market: Experts
September 12th, 2016 – The growth of the ILS market has been leveling out in 2016 with slower, more incremental increase in capital seen, which is a reflection of a healthy market that manages its capital inflows and seeks to match them to deployment opportunities, according to ILS experts.
On accelerating the transport of risk to capital (ILS + Insurtech)
September 12th, 2016 – The reinsurance and broader risk transfer market is increasingly becoming a process of matching risk to the right capital in the most efficient manner possible, with industry trends pointing to a need to accelerate the transport of risk to capital.
Interview – The pain is real: Frank Majors, Nephila Capital
September 12th, 2016 – The reinsurance pricing cycle is close to bottoming out, according to Frank Majors, co-founder and principal of the world’s largest ILS fund manager Nephila Capital.
Reinsurers need to offer most effective capital at lowest cost: Frankland, Guy Carpenter
September 12th, 2016 – The reinsurance industry has been characterised by excess capital and capacity, but the increasing range of potential capital sources has been influencing reinsurance buying dynamics, meaning reinsurers need to be able to access the most effective capital for their clients.
Demand for customised reinsurance growing: Swiss Re
September 12th, 2016 – Demand for customised risk transfer solutions are increasing within the reinsurance marketplace, according to reinsurance giant Swiss Re. The trend could result in large reinsurers coming under pressure from influential ILS fund managers, as they look to utilise the specialities and features common in the ILS sector.
Re/insurers can, and should take steps to reduce costs: PwC
September 12th, 2016 – The global insurance and reinsurance industry remains incredibly competitive as traditional and alternative capital continues to enter the space, adding pressure to rates, suggesting that market participants must do more in order to reduce costs, and ultimately increase efficiency, according to PwC.
Interview – Regulation not solvency will cause the next hard market: John Seo, Fermat Capital
September 11th, 2016 – A $100 billion catastrophe loss would not cause a significant hardening of reinsurance rates given the industry’s capacity to absorb major losses and strong appetite from the capital markets, thinks John Seo, Co-Founder and Managing Principal at cat bond and ILS specialist investment manager Fermat Capital Management LLC.
No significant growth expected in insurance & reinsurance: Munich Re
September 11th, 2016 – Over the next few years reinsurance giant Munich Re does not expect any significant growth in insurance or reinsurance demand, the company’s Board said today, which suggests that with the excess capital sloshing around the market pressure will not ease any time soon.
Big ILS funds actively raise capital, collateralised Re focus grows: Aon
September 11th, 2016 – The largest insurance-linked securities (ILS) fund managers are actively raising capital at this time, which increasingly will be diverted to collateralised reinsurance as focus on that product grows, according to broker Aon Benfield.
Tough market, all-time low, but value of reinsurance affirmed: Willis Re
September 11th, 2016 – Market conditions are slightly worse in the global reinsurance market compared to this time last year, according to Willis Re CEO John Cavanagh, however the worsening of market pricing and conditions has not materially changed in that time, providing hope that things are stabilising.
Interview – Transparency an issue across insurance, not just ILS: Bill Dubinsky, WCMA
September 11th, 2016 – In the latest in our series of interviews with figures from the risk transfer and insurance-linked securities (ILS) and reinsurance markets, at Monte Carlo Reinsurance Rendezvous 2016, Artemis spoke with Bill Dubinsky, Managing Director & Head of ILS at Willis Capital Markets & Advisory (WCMA).
Post-loss capacity most likely to come from capital markets: A.M. Best
September 11th, 2016 – Ratings agency A.M. Best expects alternative reinsurance capital to continue entering the reinsurance sector for the foreseeable future, with the majority of any additional capacity inflows after the next large event most likely to come from the capital markets.
Blockchain is “made for reinsurance”, a $10 billion opportunity: PwC
September 11th, 2016 – Blockchain, or distributed ledger technology, was “made for reinsurance,” according to PwC, and could represent a cost saving opportunity of up to $10 billion as companies look to increase efficiency and understand what the development of insurtech means for their business.
Excess capital threatens Bermuda re/insurer performance: Fitch
September 9th, 2016 – The profitability of Bermuda domiciled reinsurers is under threat from the abundance of traditional and alternative reinsurance capital that continues to drive down pricing in the sector, among a series of other market challenges, according to Fitch Ratings.
Interview – Mercury MiCRIX shows stable, attractive returns of ILW investments: CEO
September 9th, 2016 – The performance of the Mercury investible Catastrophe Risk Index (or MiCRIX for short) demonstrates that stable and attractive returns are possible by investing purely in industry-loss warranty (ILW) instruments, according to Mercury Capital Ltd. CEO Charlie Griffiths.
ILS pricing likely to remain adequate for superannuation funds: Cory Anger, GC
September 9th, 2016 – The pricing of insurance-linked securities (ILS) and other collateralized reinsurance assets in the alternative capital space, is expected to remain adequate for the segments largest investors, superannuation funds, despite an expectation of further rate reductions to come.
Alternative capital across ILS hits new heights at $75.1bn: Aon Securities
September, 9th 2016 – Alternative capital in the insurance and reinsurance market and across the range of insurance-linked securities (ILS) products has reached new heights, hitting $75.1 billion by the end of June 2016, an increase of 10% over the last year, according to Aon Securities.
Interview – Getting closer to the risk helps Securis enhance its returns: Rob Procter
September 8th, 2016 – Bringing the third-party investor capital that it manages closer to the customer, the source of insurance or reinsurance risk, helps specialist ILS investments manager Securis Investment Partners enhance its returns, according to CEO Rob Procter.
EU’s large cedants take advantage of market conditions & ILS: A.M. Best
September 7th, 2016 – The 20 largest European cedants are making the most of the softening reinsurance market cycle and the abundance of traditional and alternative reinsurance capital, according to A.M. Best.
Too early to call the bottom for catastrophe reinsurance prices: Moody’s
September 7th, 2016 – Despite the signs that pricing pressure is easing across global property catastrophe reinsurance pricing, it is still “too early to call the bottom” of the pricing cycle at this time, according to rating agency Moody’s Investors Service.
Realistic reinsurance RoE’s fall to 4.5%, challenges to continue: Willis Re
September 7th, 2016 – The realistic or underlying return on equity (RoE) of a group of reinsurance firms tracked by Willis Re fell to 4.5% in the first-half of 2016, as higher natural catastrophe losses and ongoing competitive threats continue to erode reinsurer profits.
ILS enlarges reinsurance, complements it, says SCOR. But is it in contest?
September 7th, 2016 – The development of the insurance-linked securities (ILS) market has helped to enlarge global reinsurance capacity, according to SCOR one of the world’s largest traditional reinsurers, and the firm says alternative capital is a complement to reinsurance, not a substitute for it.
Stabilising prices a false hope for reinsurance profits: Fitch
September 7th, 2016 – The reduced profitability of global reinsurers will be a key risk for the industry in 2017 warns Fitch Ratings, suggesting that some companies could see their ratings impacted by profit deterioration. Fitch also warns that reports of stabilised prices are a false hope for increased reinsurance profits.
Global reinsurance industry returns will continue to weaken: S&P
September 6th, 2016 – The softening reinsurance market cycle has persisted for longer than many market players and observers had anticipated, suggesting that global reinsurance industry returns will likely weaken further, according to analysis from Standard & Poor’s (S&P).
Capital market capacity pressures reinsurance to innovate: A.M. Best
September 6th, 2016 – The growth of ILS capacity backed by capital market investors in the global reinsurance market is “pressuring the reinsurance sector to work to charge less” according to A.M. Best, pressure that is not decreasing with alternative and ILS capital now contributing 20% of the markets capacity.
Only the costliest catastrophe could turn reinsurance pricing: RBC
September 5th, 2016 – Despite catastrophe losses in the first-half of 2016 being above the long-term average, “only the most severe event” would result in any meaningful turn from the soft reinsurance pricing, according to analysis from RBC Capital Markets.
Reinsurance is on the edge of profitability
September 1st, 2016 – Reinsurance firms are on the edge of profitability, with combined ratios rising and an expectation that even an average year of catastrophe losses could tip some companies over the edge, as market pressures continue to bite. We discuss the potential for evolutionary change to the traditional market’s business model.
Brexit could result in London losing re/insurance business: Fitch
September 1st, 2016 – The fallout from the UK’s vote to leave the European Union, or Brexit as it’s more commonly known, could result in lost business for the London insurance and reinsurance market, unless the UK government can negotiate continuity of passporting rights.
Alternative capital both competitor & partner of London market: A.M. Best
August 31st, 2016 – Despite being a clear contributor to the competitive operating environment, London market insurers and reinsurers continue to increase their use of capital markets capacity to protect their balance sheets, according to A.M. Best.
Asian reinsurance demand poised for growth: Fitch
August 30th, 2016 – Regulatory developments and advances across Asia has the potential to drive an increase in reinsurance demand in the region and, with insurance penetration being amongst the lowest anywhere in the world there’s ample opportunity for growth, according to Fitch Ratings.
“Steep decline” in reinsurance operating results in H1 2016: Fitch
August 30th, 2016 – Reinsurance company operating results suffered a “steep decline” in the first-half of 2016, according to Fitch Ratings, as return on average common equity (ROAE) plummeted by 36% compared to the same period in the prior year.
London Market specialty re/insurance line profits shrinking: PwC
August 26th, 2016 – Pricing in the London Market continues to be under significant pressure across most business lines, so much so that rate adequacy concerns are increasing in offshore energy property, marine cargo and even casualty lines, according to PwC.
Reinsurers seek returns where ILS isn’t playing, but it can soon follow
August 26th, 2016 – In an effort to offset some of the negativity in the soft global reinsurance marketplace, companies are increasingly looking to enter new and diversifying business lines where the wealth of third-party capital is yet to have a meaningful impact, according to A.M. Best.
Cyber the fastest growing peril, will require reinsurance & ILS capital
August 25th, 2016 – Cyber risk is reportedly the fastest growing insured peril across the global property/casualty (P/C) insurance space, with the market forecast to expand to $20 billion by the year 2020. With the potential exposure so vast there’s a clear need for reinsurance capital, suggesting opportunities for ILS markets.
Soft market aggregation build up a risk for reinsurers: Fitch
August 25th, 2016 – There is a risk that some reinsurance companies may have picked up “unintended aggregations” as they fight to retain business and compete their way through the soft market cycle, which presents a risk of certain firms facing larger than expected losses, according to Fitch Ratings.
Capital inflows to hurt post-event profit of London re/insurers: A.M. Best
August 24th, 2016 – London market insurance and reinsurance players have historically benefited from playing the re/insurance cycle, but in today’s highly competitive marketplace, post-event profits for the London market are under threat from sidelined capital, says A.M. Best.
Reinsurers “well-equipped” to weather the storm, for now at least: S&P
August 23rd, 2016 – International ratings agency Standard & Poor’s (S&P) has highlighted the strong enterprise risk management (ERM) practices of global reinsurers as key to success in the current market. But as market headwinds persist and margins continue to thin, the harder it will be for firms to weather the storm.
Challenges prompt London Market rethink, efficient capital & tech key: PwC
August 19th, 2016 – The abundance of capital in the global reinsurance industry and the increased prevalence of insurance-linked securities (ILS) continue to add to the challenges faced by the London insurance and reinsurance market, making efficiency increasingly important, according to Paul Delbridge of PwC.
Reinsurers utilising ILS & retro to mitigate profit deterioration: S&P
August 17th, 2016 – The persistent inflow of alternative capital in the global reinsurance industry has enabled reinsurers to adjust their risk transfer strategies, as companies look to offset continued, and potentially damaging profitability deterioration, says Standard & Poor’s (S&P).
Q2 cat losses above expectations of reinsurers: RBC Capital Markets
August 17th, 2016 – An increased level of catastrophe losses in the second-quarter of 2016 saw some reinsurers incur losses above their expectations, according to analysis from RBC Capital Markets. And with certain ILS funds feeling the impact of increased losses it’s likely that some experienced more outsized losses than others.
Reinsurance faces the strongest headwinds: RBC
August 16th, 2016 – Of all the segments within the insurance and reinsurance market, it is the reinsurers that analysts at RBC Capital Markets believe face the strongest headwinds still, as indicated by some companies higher than expected combined ratios at the mid-year point.
On spending your way out of a soft re/insurance market
August 11th, 2016 – The results of many of the insurance and reinsurance industries leading players, over the first-half of 2016, show that one response to a challenging, competitive and softening market, is to try to spend your way out of it.
Reinsurance price surge after mega-loss to be smaller: Deutsche Bank
August 3rd, 2016 – Analysts at Deutsche Bank have warned that even a mega industry loss event might not be enough for reinsurers to sufficiently push up pricing due to capacity and capital, further evidence of the flattening of the market cycle.
Inflow of ILS capital into reinsurance no longer exponential: JLT Re
August 2nd, 2016 – Alternative capital is clearly a permanent feature of the global reinsurance market and will continue to increase its share of the global property catastrophe limit, but its growth in the space should no longer be termed as exponential, says JLT Re.
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