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SiriusPoint CEO says property reinsurance faces rate and terms pressure
He expects competitive pressure into the January 1 renewals as primary and reinsurance profitability gives way to more flexible terms and conditions.
SiriusPoint’s Group President and CEO of Global Reinsurance and London Market Specialty David Govrin said the company expects competitive pressure to persist as the market heads into the January 1 reinsurance renewals, with pricing and deal terms both likely to come under focus, according to Reinsurance News.
Govrin said property reinsurance had been profitable for primary insurers and reinsurers over the past couple of years, but that rates have been coming down this year in part due to a lack of natural catastrophe losses. He added that the pressure may not show up only as pure rate cuts, but also through changes to terms and conditions, including product features.
He pointed to increased flexibility already seen this year in areas such as market drop down covers, aggregate features, and expanded coverage terms, adding that similar discussions are likely to continue for the upcoming renewals. Govrin said reinsurers have to be responsive to clients, but ultimately “it’s really just a question of price and getting paid for the risk,” especially when coverage is changing.
Govrin also discussed the growing use of artificial intelligence across reinsurance and noted that while AI can support data mining, data cleansing, analytics, and operational or process flows, there are ongoing challenges in using the technology to make underwriting and decisioning choices. He characterized AI as a tool that helps enable more access to data, while acknowledging differing industry views on how far it can be used for direct decisions.