In this article about a roundtable hosted by The Insurer at the 2022 Monte Carlo Rendez-Vous, Guy Carpenter’s David Priebe, Chairman, said that the first step in dealing with inflationary challenges at reinsurance renewals was to sit down with companies and analyze how they are addressing inflation in their pricing and insurance values and how they have been doing this over the past several years.
“We can then look at what that means for different excess-of-loss structures, where inflation can have a more amplified effect, and have an open conversation about it,” David said. “What I’m feeling good about is those conversations are happening now–in September and October–so there will be greater clarity and hopefully we can come to a meeting of minds.”
From a positive standpoint, David also said that there is discipline in the market, particularly at the primary level. At the same time, there are still multiple challenges that need to be addressed.
“There is extremely strong underlying rate momentum at the primary level, with product offerings being modified to constrain limits,” he said. “However, geopolitical conflict is creating massive uncertainty and playing havoc with investment markets. There is anxiety around climate change. We also have a potential recession on our hands and continued social unrest.”