Just how major reinsurers respond to the uncertainty and obvious nerves about the potential for major losses to continue to climb will underpin many of the conversations in Monte Carlo, says Anthony Izzo, Everest’s head of global facultative and reinsurance distribution.
Setting the framework for these crucial renewal negotiations has been at the forefront of Everest’s preparations this year, which has seen the revamp of its global reinsurance distribution strategy come to fruition, says Izzo: “We want to deeply understand and map our clients’ objectives so we can ensure our strategy meets their desired outcomes. This means working closely with our key broker partners and their clients to truly understand why they buy reinsurance, their pipeline of cessions and how they match the Everest appetite to the opportunities.
“The brokers appreciate our transparency and our determination to be up front in terms of our strategy. Of course they want no surprises. No-one can promise that any more but we aim for ‘very limited surprises’.”
It goes without saying that most clients want to discuss rates as they limber up for the hard 1 January negotiations ahead and get a sense of what to expect, whether it will be more of the same or whether new trends will emerge: “The 1 January 2023 renewals saw a hardening of the market in most classes in rates and terms. Obviously, the big questions for everyone at Monte Carlo are where is the market going to land at 1 January 2024 and what are the continued implications for property cat rate increases.
“I think it will be a more orderly market with continued pricing and term and conditions discipline,” Izzo cautiously predicts.
However it pans out, he is confident Everest is equipped to respond with effective solutions to meet the challenges brokers and clients bring to the table: “Treaty reinsurance continues to be an excellent solution for our clients needs, especially from the property perspective. There is increased frequency of events, overall volatility and claims – for instance we have had the first tropical storm recorded in California in 84 years. I envision continued hardening of rates, perhaps not to the extent of 1 January 2023, and a continued exercise of underwriting discipline. We will be deploying some incremental capacity increases if pricing and terms meet our thresholds.
“We have the capital to support this, having raised $1.5bn back in May. This was an over-subscribed situation and we intend on deploying it appropriately.”
Whatever twists and turns lie ahead in the renewal negotiations, Izzo is clear where the focus will be: “Our goal is to successfully deliver a robust value proposition to our brokers and clients as we continue to raise the Everest profile. Many of our regional leaders are here in Monte Carlo to support of our efforts.”
