From the Editor's Desk
Black Swan Assistance
The industry looks ahead to finding long-term solutions to pandemics, and an upturn in reinsurance pricing forces buyers to rethink their strategies. Also watch for discussions in the September issue with industry thought leaders about the pandemic’s impact on the industry.
- Patricia Vowinkel
- August 2020
Reinsurers typically take advantage of August to finalize preparations for the annual Rendez-Vous de Septembre conference in Monte Carlo. They've been making the trip for 63 years.
This year is different. Rendez-Vous is just one of a number of major industry events canceled this year due to the coronavirus pandemic. While the industry's key meetings have had to be put on hold, business carries on.
Two key issues on the industry's radar have been the pandemic and the hardening reinsurance markets.
The pandemic will rank as one of the largest insured losses in history, with many issues yet to be sorted out. Evan Greenberg, the CEO of Chubb, described the pandemic as “an unprecedented event of historic proportions,” as a “peril that has no bounds” and “in a practical sense has infinite tail for the industry.”
The industry has been battling pressure to retroactively cover business interruption claims when it had not collected premium and in many cases had written virus exclusions. Businesses have filed suit and the cases are now in court.
Industry leaders are seeking to take a more proactive stance and develop backstops that could help provide long-term solutions for outlier events, such as pandemics.
August is Reinsurance Awareness Month. Our reinsurance special section looks at some of the pandemic backstop initiatives in the works in the U.K., Europe and United States and we examine developments in the reinsurance market.
In “Pandemic Partnerships,” Best's Review reports on some public-private partnership backstops and speaks with some of the key influencers behind them. Stephen Catlin, CEO of Convex, discusses how Pandemic Re came together and the conditions he imposed on the steering group, which consists of a number of industry heavyweights. Best's Review also examines other initiatives in Europe and the United States.
In the property catastrophe reinsurance market rates have continued to move higher.
Even prior to the pandemic, reinsurance rates have been rising due to loss creep from major catastrophes. But those trends have continued. Kingstone, for instance, announced in July that it was scaling back its purchase of catastrophe reinsurance because of the increase in pricing.
In “A Hard Reality,” Best's Review examines the reinsurance market conditions and looks at the ramifications for Florida as well as Louisiana Citizens and the Texas Windstorm Insurance Association.
Best's Review's life insurance feature this month takes a look at an unusual problem that has gained attention due to a breach of contract lawsuit against Transamerica Life Insurance. In “An Old and a New Problem,” Best's Review examines what's known as the age 100 problem in the permanent life insurance world.
Coming up in next month's issue of Best's Review, look for our “An Industry Transformed” discussions. Top industry leaders will share their thoughts about the pandemic and its impact on the insurance industry in these discussions, which air on AMBestTV beginning Aug. 17.