Reinsurers open and motivated. Capital strong and accelerating: Klisura, Guy Carpenter

Dean Klisura, the President and CEO of Guy Carpenter has explained that the market is well capitalised and this is accelerating, while reinsurers remain open and motivated to do business.

Speaking during a briefing held in advance of the Monte Carlo reinsurance meetings, the reinsurance broking CEO noted the market still sits in a state of equilibrium.

Klisura explained, Number one is the market has ample capacity. Reinsurers are motivated to see our clients and do business in Monte Carlo and, so, people in the market have described it as equilibrium, with very engaged clients and reinsurers heading into this weekend.

“All of our clients will be entering these renewal discussions this weekend hoping to differentiate themselves from their key peers in the marketplace, and really leverage their key strategic trading relationships with reinsurers.”

On the client side he said that cedents are “focused on portfolio management and risk mitigation across their portfolios,” while on the capital provider side “reinsurance markets are really bringing a detailed and disciplined underwriting approach to each differentiated renewal at January 1.”

Despite certain published concerns around casualty lines, Klisura said, “Many of our reinsurers are open and motivated for business at 1.1, they want to grow their portfolios.”

He highlighted ongoing headwinds, of inflation, geopolitical risks and macroeconomic uncertainty, while catastrophe losses and climate change are also current concerns that will play into the upcoming reinsurance renewal discussions.

Then going on to say, “But there are also tailwinds that are benefiting our clients in the marketplace and our trading partners.

“The reinsurance market continues to be very, very strong and well capitalised. Capital in the marketplace is strong and accelerating, and for the first time in perhaps three years, we’re seeing the advent of new startups and new capital really being discussed to enter the marketplace in 2025.”

With reinsurers experiencing strong returns and insurance-linked securities (ILS) markets benefiting from this as well, Klisura does not anticipate discipline falling.

“Reinsurers want to hold their positions, want to be disciplined, and they want to write more business as we head into 2025. But we do expect continued and sustained underwriting rigor in the marketplace,” he explained.

But also hinted at the potentially tough negotiations we could see at the year-end renewals this year.

“As you heard from many CEOs this week, reinsurers want to hold their gains, really keep structures, attachment points, terms and conditions where they are, which are producing very, very healthy, ROIs for those businesses.

“So, it’ll be a challenging conference for our clients to try to make some headway in those discussions,” Klisura said.

Also read: New cat bond sponsor interest to continue in 2025, alternative capital to keep flowing: Rousseau, Guy Carpenter.