Swiss Re CUO praises orderly renewal amid good underwriting self-discipline

Swiss Re’s chief underwriting officer for P&C Reinsurance, Gianfranco Lot, has shared his insights on the 2024 reinsurance renewal season, highlighting key outcomes and developments because the business approaches upcoming renewals.

The 2023 1.1 reinsurance renewal was characterised as significantly difficult, however the 2024 renewal introduced fewer surprises. This 12 months’s renewal noticed earlier placement of retro capability, resulting in a extra orderly course of with a higher emphasis on worth discovery and elevated competitors.

Within the agency’s insights, Lot explains that brokers performed a major position in facilitating the renewal course of. Nevertheless, the business continues to face a high-risk atmosphere, with geopolitical tensions, inflation, and elevated ranges of pure catastrophes, making it essential to keep up underwriting rigor.

In numerous strains of enterprise, property reinsurance noticed a common equilibrium in provide and demand, with some oversubscription in increased nat-cat packages. Nevertheless, challenges persevered in putting decrease attaching layers.

Lot said that property per danger treaties remained troublesome as a consequence of poor historic efficiency and a scarcity of structural modifications. In US legal responsibility, moderated enhancements in phrases and circumstances have been noticed, however these weren’t deemed enough to offset loss deterioration and the difficult outlook.

Specialty strains, significantly cyber, skilled a shocking development with shoppers retaining extra danger and ceding much less to the reinsurance market, impacting proportional cessions.

Concerning contractual phrases and circumstances, no new matters emerged through the renewal, however current challenges like wording ambiguity, strikes, riots, civil commotion (SRCC), and conflict exclusions remained key focuses.

Looking forward to the 1.4 and 1.7 renewals in 2024, Lot stated that it’s too early to foretell the affect. Nevertheless, early occasions in January, together with a strong earthquake in northern Japan and incidents involving plane, together with ongoing international political uncertainty, can be elements within the renewal issues.

Lot emphasised the significance of the business sustaining underwriting self-discipline to make sure a sustainable stability in danger sharing. The laborious work throughout 2023 has set the stage for extra predictable renewals, and it’s essential that this momentum is sustained he believes.

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