How would you describe the market today?
I would describe the market as multi-dimensional, where for the past three to four years, we have really been pushing rate across the entirety of our portfolio. We are seeing segments of the market operate a bit differently and we have spent our time reviewing our accounts and our portfolios on an account-by-account basis, focusing on risk characteristics — things like geography and protection — to determine what's the appropriate price for risk these days.
When you look out in the market, are you seeing areas in particular pain, where maybe you'd like to see more rate come in?
Certainly, cyber has been consistent on that front. Overall we see an aggregated need for rate to be driven across the portfolio. Things like inflation, as we've seen that spike, we look at some of our softer years, say 2016 to 2019. And really looking at the way that tail is developing and the uncertainty created by things like wage inflation, medical inflation, the actual cost of goods, the interest rate environment, whether the models that we used to price that business, back at the time of binding, created adequate funding for what's been regular years of loss activities, severity, frequency of severity, all those trends. So we continue to focus on pushing rate, in a disciplined way and really looking on an account-by-account basis where it makes the most sense.
In the past, we've seen companies do reserve releases to make up ground they may have lost from underpricing in previous years. Do you see that scenario happening again, going forward?
Insurers are going to be prudent about reserve releases in the near future. The uncertainty that's presented by inflation, and our pricing models dictate that we need to take a cautious look at our funding for prior years and as such we will likely take a prudent approach to any sort of release activity.
