The reinsurance industry will head for Monaco for the annual Reinsurance Rendezvous this month and Chris Butcher Executive Chairman – Intermediary & Market Services says the event has more than a single overriding theme, and with it comes the opportunity for many underwriters to look at how they can adapt their approaches. 

Reinsurers will rendezvous in Monaco this month with plenty on their plates. The impact of climate change, for so long a looming issue for the market and its clients, continues with the world having seen the hottest day in history last month. 

The fact that already the North Atlantic has seen the earliest category five hurricane in history amid forecasts for an above average season in 2024 will have done little to alter reinsurers’ stance when it comes to natural perils and the rising secondary perils such as wildfire and flooding has also seen many look to tighten capacity. 

However, there are other concerns, with polycrises having now become the term best used to define the market’s current thinking. 

The global demand for cyber cover has continued to increase with primary markets looking for greater support from their reinsurers against a backdrop of brokers calling for cohesion in the approach to capacity levels, wordings and exclusions. 

Geopolitical risks are certain to be a major topic of discussion with businesses across the world concerned over the resilience in the global supply chain and the threats that comes with a year, when half the world’s population will go to the ballot box to elect national governments and leaders amid a rise in nationalism and with it protectionist policies. 

While the risks are rising the hard market which has been part of the market for years is beginning to turn. 

Broker Marsh has revealed global commercial insurance rates were flat in the second quarter of 2024. It marks the first time in nearly seven years – since the third quarter of 2017 – that the global composite rate has not increased. The continued moderation of rates was largely driven by increasing competition among insurers in the global property market.  

On average, rates decreased in Canada and the Pacific by 5%, and in the UK and in Asia regions by 3%. Rates increased in the US and Europe by 1%, and in the Latin America and the Caribbean and India, Middle East, and Africa (IMEA) regions by 4%. We have an almost perfect storm of rising risks at a time when rates are beginning to plateau if not soften. 

For Davies the Rendezvous will once again allow our teams to meet with senior figures in the market to discuss the services we can deliver for our clients and look to the relationships that can progress a number of the projects we are currently working on. The Rendezvous attracts those people in the market that can authorise deals and as such it remains a significant event in our calendar.  

What we have also witnessed in the 12 months since the rendezvous last met has been the continual growth of the MGA sector.  The attraction of MGAs both as a vehicle which allows talented underwriters to create their own operations and focus on the classes they are expert in has not diminished, nor has the willingness of capacity providers to recognise they can be a profitable and efficient home for their underwriting capital. 

The number of mergers & acquisitions, and those looking to create new businesses show no signs of slackening, indeed it could be described as vibrant. Much of our time in Monaco will be spent engaging with those who are considering a change to their business strategies and identifying how best placed we will be to assist with that. At Davies we remain acquisitive and discussions in Monaco can lead to opportunities to continue our path for growth. 

The demand for M&A has heightened the importance of identifying and accessing the best opportunities in what is becoming an ever more competitive market. Given the challenges the market faces, the decisions as to where reinsurers commit capacity are becoming ever more important, and those decisions will have repercussions for the primary markets and their clients in the months to come. 

The rendezvous provides the opportunity to understand the reinsurers’ approach to the coming 12 months and the 1st January renewals. It enables us to understand the direction the market will take, and advise our clients as to the steps which need to be taken to take full advantages of the opportunities those decisions will create. 

If you would like to continue the conversation, get in touch with Executive Chairman, Intermediary & Market Services, Chris Butcher at chris.butcher@davies-group.com