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The price game is over: Luca Albertini, Leadenhall Capital Partners


There was no talk of further reinsurance rate reductions at the Rendez-Vous de Septembre in Monte Carlo, according to Luca Albertini, Chief Executive of Leadenhall Capital Partners. Instead, the focus was on the quality of reinsurance panels, building sustainable relationships and expanding opportunities.

Luca Albertini, Leadenhall CapitalLeadenhall is an independently managed joint-venture with London market and global re/insurance firm MS Amlin. Albertini thinks it is important not to be complacent about one form of capital over another and that traditional and non-traditional products are complementary.

“If there is an event that creates a capacity shortage, everyone who has a combination of capital markets and reinsurance has the maximum leverage, both pockets of capacity to make sure they can fulfil their needs.”

For Albertini the key test of the market will be an event on the fringe of the loss, potentially one that does not trigger a payout of retro and reinsurance programmes, but could trap collateral for a year or more, so that the capacity cannot be rolled over at renewal.

He dismisses the notion that non-traditional markets have any less willingness to pay than traditional markets.

“We’re based in London and how many insurance law firms are there around the square mile? Are they there to organise a party between Cinderella and Snow White or because the insurance industry is being equally as litigious?”

With a slightly worn “Remain” sticker still on the back of his smart phone is Albertini concerned about the potential impact of Brexit on his business and the London market?

“Is Bermuda going to have a problem with Brexit? No. Who is the driver of our market? The US. Will the US care about Brexit? No,” is his straightforward response.

“I’m not a Brexiteer but for us as a company [the outcome of the referendum] is more an inconvenience, but it’s nothing insurmountable and we’re a few years away from it.”

In the ongoing soft and competitive market, opportunity lies in continuing to find ways in which to close the catastrophe protection gap and innovate to offer new products for a changing risk landscape, thinks Albertini.

“There’s so much to do in the world that’s not done. From a cat bond perspective there are so many perils that are unmodelled that even a traditional peril, like quake or flood in an area which is unmodelled, needs innovation. The question with unmodelled perils is how to present it in a credible form.”

He is particularly passionate about increasing insurance take-up in mature catastrophe markets. Referring to the M6.2 earthquake in Amatrice, Italy and California’s underinsured residential earthquake market he is adamant that governments, regulators and rating agencies must all play a role.

“The regulators need to demand that banks and mortgage lenders have abundant protection, either bought by the mortgages borrowers or by themselves,” he says. “And after a quake or other disaster occurs the government should stop sending the prime minister to the loss-hit area promising they will rebuild houses.”

“We need governments’ help in closing the insurance protection gap because that is a cost for the taxpayer,” he adds. “It’s a difficult conversation and we have it every year but it’s one we need to keep having.”

While there is significant opportunity in offering innovative solutions for new and emerging risks, this will remain a challenge given the lack of historical loss data and modelling capabilities, thinks Albertini. “If you look at some of the risks behind insurance products being sold now they have nothing to do with the products that were being sold 20 years ago.”

“The number of risks emerging in the supply chain, in transport and cyber are changing, so that’s an opportunity but it’s also a challenge because we need to be able to identify those risks and model them.”

Read all of Artemis’ Monte Carlo Rendez-vous coverage here.

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