In the video interview with AM Best TV, Vicky Carter, Chairman, Global Capital Solutions, International, discusses influences affecting the reinsurance market as we head into the January 1 renewal season.
“If you look at the US market in particular, and you look at what’s happened with inflation there—social inflation in particular—the impact that’s having on claims coming through from prior years, and we’re seeing some real changes in payout patterns,” Vicky explains. “Have companies adequately reserved against the challenges of social inflation? We’re seeing some significant numbers come out of that.”
In the casualty market, impacts vary depending on region, Vicky indicates.
“Asia Pacific is less of a casualty market. Certainly, inflation is nothing like we’ve seen in the rest of the world, in Europe and certainly in the US,” she continues. “The US and European casualty market has a huge focus on back-year development, and are reserves adequate to take care of that?”
Concerning January 1 renewals, Vicky expects the whole process should be much smoother than that experienced in 2023.
“Our anticipation is that it’s going to be a more orderly renewal season at 1/1. I know some of the other Asian territories have mid-year renewals, but we’d like to think it will be much more steady than last year,” she explained. “The pricing is more stable; there won’t be the huge increases that have been seen previously.”
Vicky also discusses how there are opportunities and developments around captives.
“If I put on my Lloyd’s hat (Vicky is also Deputy Chair of Lloyd’s), Lloyd’s is going to announce very shortly the first captive into the Lloyd’s market, which will be a massive step forward,” she continues. “It’s an exciting development. This will change the game for captives and Lloyd’s.”