Extreme weather events will focus minds as corporate insurance buyers navigate renewal season discussions - AXA XL
Alternative risk transfer and the role of the tripartite relationship will feature strongly on the Ferma Talks 2021 agenda, as corporate insurance buyers continue to navigate a hard insurance market. This is according to Etienne Champion, chief underwriting officer, APAC and Europe at AXA XL.
Commercial insurance pricing rose 13% in the second quarter of 2021 across Continental Europe (down from 15% in Q1), according to Marsh.
The floods which devastated large parts of Germany in July - along with other weather extremes experienced across the region so far in 2021 - will inevitably receive attention in the context of ongoing renewal discussions.
“Recent disasters such as the German floods or wildfires in Greece and Turkey this summer have exacerbated the capacity constraints that were already being seen across European markets,” he told StrategicRISK.
“As a result, and against the backdrop of an already challenging market, insurance capacity for most property and casualty lines will continue to be strictly controlled as we head towards renewal season. The hardening trend observed in the reinsurance market is also having an effect on primary layers.”
He emphasised the need for strong communication between insureds, brokers and underwriters as renewal conversations progress.
”It is especially the case in the current market as carriers may be asking for more data in order to provide capacity in certain area. Good risk management, more than ever, is being rewarded in renewal negotiations when we receive full, transparent risk information from our clients and their brokers.”
Where sufficient or affordable capacity cannot be found in the commercial market, corporate insurance buyers are turning to alternative risk transfer solutions, such as captives and parametric covers.
”Many of our clients have been using their captives to manage their risks in a more sophisticated way than in the past, either to retain more risk, different risks, or to use the insurance and reinsurance markets to transfer higher layers, for instance in cyber,” explained Champion.
”This not only demonstrates to underwriters that these organisations are committed to managing these risks robustly, it also often means that these clients are able to garner and communicate to us higher quality of risk information.”
“Higher attachment points, sophisticated risk management and transparent risk information are typically rewarded in the terms and conditions and capacity that insurers will deploy.”
Blog: FERMA Conference 2021 Daily News Summary
- 9Currently reading
Ferma 2021: Hard market continues
No comments yet