Hard rates to endure until industry tackles existential problems
The hard market will probably run until investors see it can produce an adequate return on investment, says Convex CEO Paul Brand.
Hard market conditions will run longer and deeper than is typical because the reinsurance industry still needs to fix fundamental, existential problems, Convex Group chief executive officer Paul Brand told Monte Carlo Today.
“This is a different type of hard market. The duration has already been longer than in the past, which is probably because there are more things to fix,” Brand said.
“The reason people are struggling to attract capital is investors can’t yet see the industry is fixed. Typically, you’ll see significant rate increases translating into significantly improved profitability and very high returns on equity, particularly from reinsurance carriers. That’s the historic story but we have not seen that this time.”
Brand cites several reasons for this, including a hangover from casualty losses, and potential reserve deficiencies. Also, the directors & officers liability market remains soft.
“Studies on the specialty market show you’re not seeing rate increases translate into improvements in the bottom line,” he said.
A sneak preview: more exclusive content and interviews inside
A sneak preview: more exclusive content and interviews inside
London Lord Mayor visits RVS, touts UK reforms on innovation
The Lord Mayor, Nicholas Lyons, had some groundbreaking thoughts on how the sector can drive growth in the wider UK economy.
In a first for the Monte Carlo Rendez-Vous, the Lord Mayor of London attended this year, with the aim of promoting the city to the global risk transfer markets.
Nicholas Lyons, also a board member of Convex and Miller (when not on sabbatical as mayor) had some groundbreaking thoughts on how the sector can drive growth in the wider UK economy.
