REINSURANCE
Everest CEO: Reinsurers, Clients Adapt to 'New Norm' in Risk Landscape
MONTE CARLO, Monaco //BestWire// - Juan Andrade, president and chief executive officer, Everest Group, said concerns about social inflation and legal-system abuse are contributing to increased severity in claims across the industry. Andrade spoke with AM Best TV at the Rendez-Vous de Septembre conference in Monte Carlo.
Juan AndradeView the video version of this interview here.
Following is an edited transcript of the interview.
Q: As ever in Monte Carlo, lots of talk about the availability of reinsurance capacity. What can we expect from the forthcoming renewals?
A: I think it's going to be a question of what line of business and in some cases what geography. I think from a property catastrophe perspective, which is usually the highlight here in Monte Carlo, this year is going to be fairly seamless. I think most people have gotten used to the new norm of sort of where we are right now. I think, again, that'll be a fairly seamless renewal.
The talk here now is really about casualty and some of the broad-based trends that we're seeing, particularly in the United States with what's euphemistically called social inflation, legal system abuse, basically. Sort of the increase in severity that we're seeing come through, throughout the industry. I think that is really the main topic of discussion here.
Q: Conversations between buyers and sellers of reinsurance. Have the expectations of reinsurance buyers changed in light of some of the recent developments?
A: I think there's been adaptation probably on both sides of things, particularly when we think about property catastrophe risk. The reality is most of the reinsurers have gone up in attachment points. I think a lot of the cedes have now figured out ways to do things differently with their buy and their programs. I think from that perspective, yes, I think there has been an adaptation to the new regime.
Q: Discussions between reinsurance buyers and sellers of reinsurance. How important is it for the future of the industry that it seemed to be serving the needs of its clients?
A: Absolutely. Look, I think our industry is very special in the sense that we are the oil that fuels the world economy at the end of the day. We just can't do business without having insurance and reinsurance. I think we continue to be very relevant and very important to that effect. Just think about the impact of natural catastrophes and how people recover, how businesses recover. It's really reinsurance and insurance capital that's making that happen.
You look at all the geopolitical issues around the world right now. You look at the heightened risk environment also from a catastrophe standpoint. If it weren't for our industry, it would be very difficult for people to innovate and to do essentially their jobs. I think we're very critical and continue to do so. We frankly continue to strive to serve our customers the best way possible to help them do their jobs.
View this and other interviews at http://www.ambest.tv
(By Staff Report, bestday_news@ambest.com)