Bringing great ideas to life - as Managing Director / Member of the Management Team, Strategy&, part of the PwC network
Today, I had the pleasure of attending #AM_Best's informative Reinsurance Market Briefing at #RVS2024. Here are my key takeaways: ? - The market outlook remains positive, with sustainable underwriting margins. - There is investor pressure for underwriting discipline to continue for a longer period. - Unlike in 2001 and 2005, AM Best does not anticipate a new wave of reinsurance startups emerging in 2024. This is due to the different market structures today, with investors having alternative options such as #ILS with lower liquidity risks and more attractive exit opportunities. Record inflows into ILS seem to prove this. Additionally, non-capital-intensive models like MGAs are gaining attention and attracting investors with higher multiples. - Reinsurers' relative underperformance in recent years compared to other sectors has made investors cautious about the sustainability of current attractive ROEs. This sentiment is echoed by what we hear in our own work with sovereign wealth funds and other large asset owners. - The use of #AI in underwriting was discussed, with the suggestion that smaller solutions may be more appealing to reinsurers than large-scale platforms. Reinsurers need to convince regulators and rating agencies about the quality, limitations, and control of their AI models. With generative AI being self-developing by definition, I believe this will need to be further explored.
