SIRC is just around the corner, and it remains the biggest meeting of the minds that the region experiences. Industry experts express their thoughts on the main issues that the industry needs to discuss, and their expectations of the event.
The 19th SIRC 2023’s theme is (Re)insurance Reset, which will attempt to cover a broad scope of topics that challenge the (re)insurance industry today. The industry must demonstrate its continued relevance and ability to close the gaps that affect society, from financial inclusion, to turbulent inflation and an uncertain climate. With so many crises impacting the region, each (re)insurer has its own set of priorities and concerns.
Aon Reinsurance Solutions CEO Asia Pacific George Attard
The conversations at this year’s Singapore International Reinsurance Conference should reflect a return to a more orderly and profitable market, providing an opportunity for reinsurers to focus on delivering value to insurers, and for insurers to reward reinsurers that are pragmatic, flexible and creative.
Following the global reset in property catastrophe pricing and retention levels in January 2023, Asia Pacific continued to experience challenging renewals through to the mid-year renewal, with continued focus on pricing and retention levels. However, the renewals were more orderly, as reinsurers re-established their risk appetite and insurers successfully navigated the changing market dynamics.
As we move towards 2024, the reinsurance market is now in a more sustainable position – with rate adequacy for property catastrophe, and strong investment returns already driving improved reinsurer results in the first half, despite above average industry natural catastrophe losses.
As a major driver of this improved outlook, we have seen global reinsurance capacity increase steadily this year. Aon estimates that through the first half of 2023, global reinsurer capital had increased by 10.7%, or $60bn, since the third quarter of 2022, to reach $620bn, principally driven by retained earnings, recovering asset values and new inflows to the catastrophe bond market.
Capital has entered the market via third party investors aligned with traditional reinsurers, as well as through insurance-linked securities (ILS). In terms of the ILS market, following a record first half catastrophe bond issuance, the sector is on-track to achieve a record full year issuance. This market has proved itself to be a key supply-side driver in the property catastrophe space, with current pricing at levels that are competitive with the traditional sector.
As market stability brings optimism, our focus this renewal season is helping our clients to optimise their capital strategies through accessing diversified capital sources across traditional reinsurance, alternative capital and new sources of capital; and exploring alternative structures including structured, legacy and facultative solutions. As solutions in these areas become even more innovative, we expect this trend to gather pace.
We look forward to driving differentiation and navigating volatility for our clients, leveraging the strength, relationships and expertise of our team across Asia Pacific, and ultimately helping to shape better business decisions. With capability across Aon’s Reinsurance Solutions, insights from the firm’s Strategy and Technology Group, and access to the broader Aon global network, we consider ourselves employer of choice in the region, with a dynamic team focussed on addressing our clients’ multi-faceted needs using our Aon United approach to work holistically across their businesses.
My colleagues and I look forward to greeting our clients from across Asia Pacific at this year’s SIRC event. Together, we will explore capital strategies with our clients, showcase an array of solutions at our innovation lab, and introduce our capital optimisation poll, which aims to produce insightful industry trends.
Everest Re CEO Singapore Branch Kevin Bogardus
For those less familiar with SIRC, it is the preeminent forum in Asia where all key stakeholders come together to address the critical issues confronting the market. During today’s particularly hard market, there is global demand for quality capacity, and it is essential that there is open communication and exchange of ideas so that the industry can best respond to the evolving needs and minimize any dislocations.
As we head into SIRC 2023, what’s most important is ensuring that the reinsurance industry continues to provide timely and adequate support to its clients. Especially in today’s elevated risk environment, it is crucial that there is adequate cover in place to safeguard insureds and society overall. In order to do this, the reinsurance industry must act responsibly by maintaining price discipline but not taking advantage of the market dislocation. Ultimately, as an industry we should be striving to have less volatility in pricing and coverage over time and try to avoid huge price and coverage swings between hard and soft markets.
Here at Everest, we put our relationships first and we’re firmly committed to supporting and growing with our Asian clients, now and into the future. As a demonstration of this, we have increased our available capacity and we are constantly investing in our people, systems and products to enhance our offering. In terms of supporting our partners, regardless of the market our approach doesn’t change. Clients know what to expect from Everest – we’re consistent, transparent and fair in how we conduct business, and we work collaboratively with our partners to ensure they receive the right terms and conditions at the right price.
We also take a long-term view on our business, and we expect our relationships with clients and partners to be broad-based in order to withstand the traditional swings of the market. To underline this, we do not wish to simply be a transactional reinsurer but rather a strong strategic partner. While at SIRC we plan to continue strengthening our relationships by maximizing our time with key partners and identifying how we can continue to effectively deploy our increasing capacity and financial strength to further assist the achievement of their financial objectives and ultimately the overall stability and wellbeing of the countries/societies in which we operate.
This year’s SIRC, which will take place from 30 October to 2 November, is expected to be busier and larger than ever before; the combination of post-pandemic recovery and the need to understand how the market is changing is drawing the attention of many.
Once again Asia Insurance Review (AIR) will be the official media partner of the SIRC for 2023 – with regular updates on the progress of the work of the SIRC executive committee featuring in AIR’s various media.
To coincide with the start of the SIRC, the 27th Asia Insurance Industry Awards 2023 will also be held in Marina Bay Sands Expo & Convention Centre in Singapore on the evening of 30 October 2023.
The market-leading AIR eDaily will carry news of developments on a regular basis as they happen. A