AM BestTV at the SIRC Conference: Capacity Crunch Looms in Retrocession Market

Business Wire

OLDWICK, N.J.--(BUSINESS WIRE)-- In this ^AMBestTV episode from the Singapore International Reinsurance Conference (SIRC) in Singapore, attendees said that as a result of additional catastrophe losses in 2019 and trapped capital in the insurance linked-securities market (ILS), the demand for retrocession insurance may outpace supply, pushing prices higher. Click on http://www.ambest.com/v.asp?v=sirc21019 to view the entire program.

Catastrophe losses in 2019 are expected to dent reinsurance earnings, and those losses also can result in an additional capacity crunch in the retrocession market.

“What we expect to see is a continuing hardening of the retrocession markets,” said Philippe Dormart, head of underwriting, property/casualty, Partner Re Ltd. “The losses into 2019 have continued to pile up and impact the retrocession market, whether it is traditional capital or ILS-driven. We expect the hardening to continue in the retrocesssion space.”

Zainudin Ishak, president and chief executive officer, Malaysian Reinsurance Bhd, addressed how this retrocession market is impacting his company’s ability to operate in the space.

“We have a situation in the last couple of years where the retrocession market is getting more and more challenging, as well as a more difficult formulation for a reinsurer like Malaysian Re. Do we have capabilities to transfer some of the rising cost of the retrocession to our partners? The answer is no, and so the margin formulation is being compressed,” he said.

For full video coverage of the SIRC conference, including exclusive executive interviews, visit http://www.ambest.tv/sirc19.

Other people that appear in this episode:

Soren Soltysiak, chief underwriting officer, Asia Capital Re;
Maurice Williams, managing director, Willis Re;
Amer Ahmed, chief executive officer, reinsurance, Allianz; and
Steve Arora, chief executive officer, AXIS Re.

Recent ^AMBestTV coverage from the SIRC conference includes:

SIRC Attendees Say Challenges Include Weather, Talent and New Coverages: At the Singapore International Reinsurance Conference (SIRC) in Singapore, attendees said pricing discipline, remaining relevant and retaining talent are among the challenges facing the reinsurance market next year: http://www.ambest.com/v.asp?v=sirc11019.
SIRC Attendees: Recent Catastrophes Shift Focus to Catastrophe Modeling: Recent natural catastrophe losses in Asia-Pacific have highlighted the challenges of catastrophe modeling, SIRC attendees said: http://www.ambest.com/v.asp?v=sirc31019.
AM Best Managing Director: More Asian Domiciles Are Moving to Risk-Based Regulatory Systems: Greg Carter, managing director of analytics for India and Asia-Pacific, AM Best, said risk-based capital regulatory systems generally give rise to a stronger insurance sector, although operating performance can lag in the short term: http://www.ambest.com/v.asp?v=gregcarter1019.
AM Best Singapore Co-Chief Executive Officer: Insurance Growth, Cross-Border Operations Create Demand for Ratings: Scott Ryrie, co-chief executive officer, AM Best Singapore, said Indonesia, Thailand, the Philippines and other Asian locales have shown growing demand for ratings: http://www.ambest.com/v.asp?v=ryrie1019.

^AMBestTV covers exclusive AM Best and insurance industry information and reports, targeted topics and key developments in the insurance, reinsurance and related sectors daily. Sign up for alerts of episodes at http://www.ambest.com/multimedia/ambtvsignup.html. View ^AMBestTV episodes at http://www.ambest.tv.

AM Best is a global credit rating agency and information provider with an exclusive focus on the insurance industry. Visit www.ambest.com for more information.