Monte Carlo Reinsurance Rendez-Vous news

Hannover Re’s CEO says that the reinsurance company sees good opportunities in insurance-linked securities (ILS) and intends to leverage its strong position in that marketplace.

Philipp Rüede, Head of Swiss Re’s Alternative Capital Partners (ACP) unit told us in an interview that the outlook for use of alternative capital and for insurance-linked securities (ILS) as an asset class has “significantly improved”, with expected returns now doubled or tripled in some ILS strategies.

Speaking this morning in Monte Carlo executives from global reinsurance firm Hannover Re said that the Vesttoo issues with allegedly fraudulent letters of credit (LOC) is an “eye opener” but not systemic and they see no impact to their own pipeline of business in the insurance-linked securities (ILS) market.

The market for catastrophe risks could double by 2040, with continued growth expected over the coming years, according to SCOR CEO Thierry Léger, but he also cautioned that the industry must work to address the current insurability challenge, especially in relation to climate change.

The global reinsurance sector highlights climate change as the top risk facing their businesses, a new survey from PwC shows, highlighting the need for the industry to innovate on solutions for this exposure.

Signalling an expanding marketplace is ahead, Swiss Re said this morning that the non-life reinsurance sector is expected to grow at a faster rather than GDP over the next decade and that sustainable pricing must persist at the January 2024 renewals.

Speaking today in Monte Carlo at the annual reinsurance market Rendez-Vous de Septembre event, Thomas Blunck, a Member of the Board of Management at global reinsurer Munich Re, said he does not expect major capital inflows to either the traditional or alternative sides of the market.

Because the current hard market in reinsurance is largely focused on the shorter-tailed lines of business, like property catastrophe risks, Taoufik Gharib, Senior Director at S&P Global Ratings, said today in Monte Carlo that capital may choose to enter through sidecars or collateralized reinsurance instead of new reinsurer startups.

Speaking this morning at an event in Monte Carlo for the 2023 Reinsurance Rendez-Vous, analysts at Fitch Ratings said that the Vesttoo scandal may push investors in insurance-linked securities (ILS) to focus on the safety of structures and the security of collateral.

Swiss Re, one of the largest global reinsurance companies, said today that the hard market in property catastrophe lines is expected to continue, as a supply-demand disequilibrium persists and profitability remains challenged for the non-life re/insurance segment.