Monte Carlo Reinsurance Rendezvous 2018

Monte Carlo Reinsurance Rendezvous MonacoThe 2018 Monte Carlo Reinsurance Rendez-vous is upon us, the 62nd anniversary of the reinsurance, insurance and more recently insurance-linked securities (ILS) meeting in the south of France, where market participants discuss the next major reinsurance renewals season.

Since 1957 reinsurance companies, clients, investors and service providers have met in the sun (and occasionally rain) in Monte Carlo, Monaco at the reinsurance Rendezvous event, making it a busy time for analysis, news and insight on the market.

This page details our Monte Carlo Reinsurance Rendez-vous 2018 coverage in chronological order (most recent at top), 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, as well as any interviews we conduct.

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The latest:

Capital market risk premium will determine reinsurance cycle: Lixin Zeng, AlphaCat
September 12th, 2018 – The reinsurance cycle will continue, but future peaks and troughs will increasingly be shaped by capital market appetite for insurance risk, thinks Lixin Zeng, chief executive of AlphaCat Managers Ltd.

Price insensitive ILS investors? Or just a different cost-of-capital?
September 12th, 2018 – As the reinsurance industry begins its discussions on the prospects for January 2019 renewals buyers are pushing for rate reductions in lines of business that have been performing, but a fully soft market is not a foregone conclusion.

Response of ILS capital one of the big surprises: Denis Kessler, SCOR
September 12th, 2018 – One of the big surprises in the reinsurance sector following the level of catastrophe losses in 2017 was the reloading and expansion of alternative, or third-party reinsurance capital, according to the Chairman and Chief Executive Officer (CEO) of SCOR, Denis Kessler.

Florence could tie up retro collateral: Luca Albertini, Leadenhall
September 11th, 2018 – As Hurricane Florence bears down on the US East Coast as a category 4 storm, Luca Albertini, CEO and founding partner of Leadenhall Capital Partners warned that regardless of whether it is a market-changing loss, it could trap collateral in retro programmes.

ILS an established force, but may be in unsustainable territory: Swiss Re CEO Christian Mumenthaler
September 11th, 2018 – The insurance-linked securities (ILS) market has become “an established force” in the natural catastrophe underwriting markets, but Christian Mumenthaler, the CEO of reinsurance firm Swiss Re, questions whether ILS markets are operating in sustainable territory.

Great reload was death knell for traditional reinsurance cycle: John Seo
September 11th, 2018 – Fermat Capital Management’s John Seo explains to Artemis why the “great reload” of 2018 sounded the final death knell of the traditional reinsurance cycle.

ILS in the hands of a risk originator: Brian Duperreault, AIG
September 11th, 2018 – Brian Duperreault, the CEO of insurance giant AIG, discussed the state of his company, the progress he is making in his mission to turn it around and market forces in a speech in Monte Carlo yesterday.

Don’t kill the Golden Goose: Frank Majors, Nephila Capital
September 11th, 2018 – Insurance and reinsurance firms should not take it for granted that capital will flow into the industry in the aftermath of another major loss, thinks Frank Majors, co-founder and principal of Nephila Capital.

Expect more ILS-related M&A, more value-chain compression: Aon
September 11th, 2018 – The market should expect more mergers and acquisitions (M&) activity surrounding ILS funds or entities as re/insurers look to harness the capital markets, while at the same time efforts to bring the capital markets further along the value-chain are seen as “intelligent”, according to Aon executives.

PCS aims to help understanding of the silent side of cyber risk: Johansmeyer
September 10th, 2018 – The enhancement of the PCS Global Cyber Index to include cyber catastrophe is in response to client demand, and is another positive step in helping the international risk transfer industry both understand and address the growing cyber threat.

ILS a landmark opportunity to strengthen London’s influence: Potter, GC Securities
September 10th, 2018 – The United Kingdom’s insurance-linked securities (ILS) and risk transformation regulations offer “a landmark opportunity to strengthen London’s influence in the global (re)insurance market,” according to Des Potter, Managing Director, GC Securities.

Survival – it’s all about the value you bring to the chain
September 10th, 2018 – At this time of year, as peak-conference season begins, the market tends to reflect on conditions and the drivers setting up dynamics for year-end and beyond.

Break-even year may push ILS investors to call for better returns
September 10th, 2018 – For insurance-linked securities (ILS) fund investors who faced their heaviest losses ever in 2017 (said up to $18bn this morning), another loss impacted year, even if breakeven, could be sufficient to cause them to call for better returns.

Alternative capital a growth opportunity for Tokio Millennium Re: Kathleen Faries
September 10th, 2018 – The Head of the Bermuda branch of Tokio Millennium Re AG (TMR), Kathleen Faries, has said the firm sees its important strategic partnerships with alternative, or third-party reinsurance capital as a growth opportunity.

ILS innovation alive and well: Shiv Kumar, GC Securities
September 9th, 2018 – A series of groundbreaking catastrophe bonds covering new perils and indemnifying new sponsors have been well received by investors, according to Shiv Kumar, president and global leader of GC Securities, Capital Markets.

Munich Re calls for capital markets support on cyber accumulation risks
September 9th, 2018 – Munich Re, the largest reinsurance company in the world, has said it would welcome capital markets support in providing capacity for cyber accumulations risks.

Aon launches team to deliver on capital (agnostic) optimisation
September 9th, 2018 – Aon’s Reinsurance Solutions division has launched a new Capital Advisory team led by Eric Paire, as it recognises the need to deliver on capital optimisation for its clients.

Reinsurance Renaissance = Tech + Securitisation: Willis Re
September 9th, 2018 – The reinsurance market is on the cusp of entering a renaissance period driven by technology and securitisation, according to senior executives from broker Willis Re.

Margin improvement required to make non-life profitable: Swiss Re
September 9th, 2018 – Non-life insurance is becoming unprofitable and without significant improvement in underwriting margins, global reinsurance firm Swiss Re says that insurers will fail to deliver sustainable returns.

Global reinsurance market survey results now available to view
September 7th, 2018 – Reinsurance & ILS demand is expected to rise, but price is key, we found in our first global market survey. Reinsurance News and Artemis have teamed up to take the temperature of the global reinsurance market at what is a key time for the industry.

ILS drives reinsurance capital growth, underlying reinsurer RoE’s decline: Willis Re
September 6th, 2018 – It was further growth of the alternative reinsurance capital and insurance-linked securities (ILS) market that drove an increase in overall reinsurer capital at the end of the first-half of 2018, according to Willis Re, but this comes against a backdrop of further deterioration for underlying reinsurer returns-on-equity (RoE’s).

Reinsurance rates likely to disappoint again at January 2019: Rating agencies
September 5th, 2018 – The main rating agencies for the reinsurance industry are largely lacking in optimism when it comes to prospects for reinsurance pricing at the key January 2019 renewal season.

Alternative capital vehicles provide “competitive advantage” – Moody’s
September 4th, 2018 – Alternative capital vehicles operated by traditional reinsurance firms are increasingly an area of competitive advantage for the sector, according to rating agency Moody’s Investors Service, something that may accelerate the shift towards re/insurer managed ILS assets.

Fitch ups reinsurance outlook to stable, but lower returns expected
September 4th, 2018 – Rating agency Fitch Ratings has changed its outlook for the global reinsurance sector from negative to stable, in a move that might surprise many given the continued influence of market forces on reinsurers ability to generate returns.

Reinsurers need to offer more than just capacity, ILS can help: S&P
September 4th, 2018 – Aside from the very largest of global reinsurance firms, the rest of the pack need to understand that they need to do more than just provide reinsurance capacity, as that can be more simply and less expensively delivered through the capital markets, according to S&P.

New reinsurance normal wins out, optimism diminished: A.M. Best
September 4th, 2018 – The new normal in reinsurance markets has won out, as pricing optimism following last years major catastrophe losses fizzles out, while the march and influence of alternative capital continues to impact reinsurers ability to earn back their losses.

Hannover Re sees ongoing opportunities in ILS: Henning Ludolphs
August 30th, 2018 – Reinsurance giant Hannover Re continues to take advantage of the expanding insurance-linked securities (ILS) sector, and sees further opportunities in a marketplace that is “here to stay,” according to Henning Ludolphs, Managing Director of Retrocessions & Capital Markets at Hannover Re.

Payback has expired, symbiotic relationship with ILS emerging
August 29th, 2018 – The reinsurance market evolution continues and as ever alternative capital and the insurance-linked securities (ILS) market is placed centre stage in any discussion of the disruption of traditional business models, but now that the payback model of the past has expired, a new and more symbiotic model with ILS is emerging.

M&A is one strategic response to capital markets threat, says S&P
August 24th, 2018 – Mergers & acquisitions between major insurance and reinsurance firms continue to drive consolidation and rating agency Standard & Poor’s explains in a new report that it sees M&A as just one of the ways traditional players are responding to the threat posed by ongoing reinsurance and capital markets convergence.

Retrocession market increasingly dependent on third-party capital: S&P
August 21st, 2018 – The retrocessional reinsurance market has become increasingly dependent on the capital markets and insurance-linked securities (ILS), with third-party capital providers beginning to dominate that sector and reinsurers increasingly utilising third-party capital backed retrocession.

Scare factor has gone, rate momentum to fade in 2019: S&P analyst
August 16th, 2018 – The reloading of capacity after the 2017 catastrophe losses showed that the scare factor has gone for investors, according to S&P analyst Taoufik Gharib, meaning that fears of a softer-for-longer rate environment are unlikely to deter capital providers and as a result rate momentum is likely to fade in 2019.

Top reinsurers capital redundancy drops below ‘AAA’ level: S&P
August 16th, 2018 – Despite the constant reports of overcapitalisation in reinsurance, S&P reports that the top 20 reinsurance firms in the world have lost their capital redundancy at the ‘AAA’ confidence level for the first time since the financial crisis back in 2008.

ILS has transformed reinsurance, conquered property cat: S&P
August 15th, 2018 – The use of insurance-linked securities (ILS), catastrophe bonds and collateralized reinsurance has transformed the reinsurance market and conquered the property catastrophe space, according to S&P, providing companies with a lever to acquire premium growth while still managing and controlling their peak exposures.

Reinsurers increased cat exposure means repeat of 2017 could hurt: S&P
July 26th, 2018 – After picking up roughly 20% of the roughly $92 billion of insurance industry losses from major hurricanes Harvey, Irma and Maria, half of the top 20 global reinsurance firms tracked by rating agency Standard & Poor’s have actually increased their exposure to natural catastrophe risks.

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