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Reinsurers told to prove value as competition keeps rates soft
Westfield Specialty’s Christopher Gray said near record capacity from alternative capital and consolidation will likely keep pressure on reinsurance rates ahead of January 1 renewals.
Reinsurance News reports that Westfield Specialty International’s Christopher Gray said reinsurers seeking to win business at January 1 renewals must offer more than additional capacity or lower pricing as competition remains intense and the market stays soft.
Speaking around the 68th edition of the Monte Carlo Rendez-Vous, Gray linked the outlook to strong earnings, limited catastrophe losses, and growth in alternative capital that has pushed capacity to near record levels. He also cited consolidation reducing the number of buyers, which he said helps sustain pressure on rates and makes it unlikely to disappear soon.
Gray said reinsurers need to shift from a focus on saying “no” to instead addressing “how,” emphasizing creativity and practical solutions to help clients manage volatility, protect earnings, and handle emerging risks. He added that clients are increasingly looking for partners that engage with challenges, including investment in areas such as emerging technology risks, evolving casualty exposures, and bespoke structured solutions.
He further noted increased demand for structured and specialist solutions, including aggregate covers, loss portfolio transfers, and adverse development covers, as clients seek ways to manage volatility, legacy exposures, and capital pressures. Gray said there is also growth potential in evolving cyber and other specialty exposures, where reinsurance can support innovation, and he emphasized that the sector is built on long term relationships rather than short term plays.