Chairman Guy Carpenter: This is one of the most difficult and complex markets in years.

“As an industry, we’ve faced a lot of challenges,” said Priebe at Guy Carpenter’s “Materializing Possibilities” media briefing. “The conditions at the forefront of the current market environment are complex and intertwined. It means we need a focused outlook based on a realistic, data-driven strategy.”

The current market environment is unique because of so many overlapping challenges. Recession fears come to a head as governments work to curb inflation and the stock market remains in bare territory. This follows a period of profound socio-economic change due to the COVID-19 pandemic, which has changed the way people live and work.

“This, combined with continued uncertainty about loss trends from entrenched inflation, supply chain issues, the Russian-Ukrainian conflict, climate change and social inflation, will make the reinsurance industry more resilient and innovative than ever before. It means you have to keep demonstrating your sexuality,” Prive stressed.

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Inflation has become a key area of ​​market focus since countries around the world began raising their consumer price indices (CPI) in response to stagnant consumer demand following the COVID-19 pandemic and Russia’s invasion of Ukraine. I’m here. According to Priebe, rising inflation has “shifted the insurance revenue storyboard from top-line growth to bottom-line focus, with a focus on differences in current and historical pricing and loss trends. rice field”.

In this environment, reinsurers such as Guy Carpenter need to analyze the impact of inflation and other potential loss drivers on individual portfolios, communicate the adjustments insurers are making to the wider market, and It plays a key role in reassessing an insurer’s risk tolerance to ensure the solution is adequate. Mitigation efforts protect that downside.

“The insurance market is currently in a strong cycle for 19 straight quarters,” Mr Priebe added. “This will provide the industry with a stronger foundation to meet new challenges. Earnings have improved due to increased insurance coverage rolling rates. Restructured by underwriting Loss trends and loss picks are frequently reassessed in an uncertain and ever-changing environment. We are strategic and carefully assess the risks we respond to before undertaking.

“To solve our most complex challenges, we must go beyond the typical reinsurance offering. Recognizing and embracing their role: We provide the critical mechanisms for much-needed recovery after a loss, and research and develop policies to create a better approach before a loss occurs. Innovation, and the ability to define, should not be overlooked either.”

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Looking ahead to 2023, Chairman Guy Carpenter said insurers and reinsurers should continue to monitor 2022 loss performance. He was valued at $16 billion by S&P, but after his first six months of the year, it’s about $38 billion.

Priebe said: “Therefore, cedant differentiation remains very valuable, especially in loss-affected regions and routes. The final impact also needs to be examined: The gap between reported losses and the consensus total is still large.

“In addition to higher than average loss activity, CAT budget depletion is a major concern for rating agencies and investors. It creates headwinds for sex and capital.”

Prive said he expects demand for reinsurance to remain strong “as risk awareness and a desire for downside protection spread across the industry in this uncertain environment.” He describes the current environment as “one of the most challenging and complex markets he’s seen in years” and predicts the January 1, 2023 update will follow similar themes he experienced in mid-2022. Did.