Reinsurance rates are inadequate, according to a panel of Bermudian-based executives attending the Monte Carlo Reinsurance Rendez-Vous de Septembre event.
They shared views at the annual Bermuda: Re and ILS Monte Carlo Roundtable, held in association with Markel Re.
Christian Dunleavy, chief underwriting officer at Aspen Re, said that while rates are improving, any increases are merely keeping pace with loss cost inflation and reinsurers are not gaining any extra margin in real terms. “There is a long way to go on rates,” he added.
Adam Szakmary, director of underwriting-Bermuda, Hiscox Re + ILS, said: “In the past, the spike in rates post-event was more pronounced. Without that, the cycle should be smoother but rates must be sustainable.”
Dan Malloy, chief executive officer of Third Point Re, said that rates were improving but further increases were needed.
Meanwhile Peter Gadeke, executive vice-president of Willis Re, Peter Gadeke, said rates increased at the June 1 renewal but that represented a recalibration of the cost of risk. He doesn’t necessarily believe that rates will go up in the January 1 renewal period.
He said: “Retro rates will increase and insurers are also achieving rate increases, but reinsurers seem to be squeezed in the middle.”
Intelligent Insurer, a publication that covers the re/insurance market, reported on the panel in its special edition, Monte Carlo Today.
The appetite of alternative capital investors seeking to enter the Bermuda market continues, according to Appleby partner Brad Adderley, who said he was aware of a number of new vehicles that would be entering the market by year-end.
Andre Perez, chairman and CEO of Horseshoe Group, said his company was seeing significant inflows of alternative capital into the sector.
Others involved in the panel included John Huff, president and CEO of the Association of Bermuda Insurers and Reinsurers; Greg Wojciechowski, president and CEO of the Bermuda Stock Exchange; Arthur Wightman, PwC Bermuda insurance leader; and Kathleen Faries, chair of ILS Bermuda and of RICAP Bermuda.