Industry executives gathered at SIRC to discuss how mounting geopolitical tensions and economic fragmentation are reshaping the reinsurance landscape.
The global reinsurance industry finds itself at a critical juncture, facing unprecedented challenges from geopolitical tensions, regulatory fragmentation and evolving risk landscapes. At the Singapore International Reinsurance Conference (SIRC), a diverse group of industry leaders convened for an inaugural Global Leadership Outlook Roundtable to discuss how these forces are reshaping their strategies and approaches to risk.
Fragmentation and uncertainty
The conversation opened with a frank assessment of the current economic trajectory. Berkley Re CEO Asia Pacific Glen Riddell, observed that whilst the world has emerged from pandemic disruptions, uncertainty persists.
“We’re starting to see trade agreements being finalised which should assist in greater stability in the region,” he said.
This fragmentation extends far beyond trade policy. SCOR P&C CEO Jean-Paul Conoscente noted significant variations in demand across geographies, with India showing strong growth whilst China and Southeast Asia experience slower momentum. “Different countries face distinctly different dynamics, requiring tailored approaches rather than uniform strategies,” he said.
Munich Re Chief Executive Japan, India, Korea and South-East Asia Hitesh Kotak highlighted the divergent pressures on both sides of the balance sheet. “If I look at the asset side, we expect some challenges because of inflationary trends. Public debts are at all-time high, putting pressure on the fiscal side of the respective governments,” he said.
On the liability side, he added, demand creation remains difficult despite hopes for infrastructure spending and job creation in emerging markets.
Gallagher Re Chairman Southeast Asia Richard Jones added that climate change and tariff-induced inflation have layered additional uncertainty into an already complex risk management landscape. The consensus amongst participants was perhaps best captured by Swiss Re CEO P&C Reinsurance Urs Baertschi, who said he’s learned to describe virtually every situation as “fluid and dynamic” – terms that now permeate nearly every strategic discussion.
Partner Re CEO James Beedle offered a sobering reality check, warning against assumptions that markets will return to equilibrium. He pointed to fiscal deficits as a critical concern, with governments struggling to balance their books in ways that impact currencies and pricing across the board.
From an Asian perspective, Sompo Japan Insurance Chief Risk Officer Koji Takahashi highlighted unique opportunities arising from divergent monetary policies, particularly Japan’s interest rate increases against global rate reductions, creating interesting asset allocation possibilities for Japanese global companies.
Guy Carpenter Managing Director and Head of Capital Advisory Asia Pacific Justin Ward emphasised the need to address insurance density gaps in high-growth economies. Despite strong GDP growth in markets like the Philippines and Indonesia, insurance penetration remains low, requiring closer collaboration with policymakers and regulators to stimulate demand.
Geopolitical tensions and the cost of capital
Howden Re Head of Industry Analysis and Strategic Advisory David Flandro provided a macro perspective on the fundamental shift underway. “It is no longer clear that we are operating in a globalised Ricardian framework; this appears to be giving way to a more mercantilist system, contributing to heightened global risk premia which fundamentally change the economics of risk transfer as contingent capital,” he said. “In this environment, where reinsurance sits alongside equity and debt in the Modigliani-Miller capital structure for insurers, its value proposition has increased as the costs of other forms of capital have risen.”
However, regulatory protectionism threatens to undermine this efficiency. Mr Baertschi articulated concerns around localisation requirements and capital trapping: “The value we provide to the insurance industry, and then to the end consumer, is a globally efficient capital and operating model. If that gets undermined, reinsurance capital will become more expensive and less available,” he said.
Mr Conoscente reinforced these concerns, noting that regulatory demands for local capital retention restrict the flow of capacity and drive costs up beyond just Nat CAT losses. The regulatory burden itself has become a significant cost driver.
Echo Re CEO Fabian Puetz offered a pragmatic view on navigating geopolitical tensions. Whilst respecting regulatory red lines like sanctions, he emphasised the importance of maintaining an inner moral compass rather than allowing partnerships to be dictated by shifting political agendas. “Geopolitical positions like ESG or taxonomy can change overnight with the election of a new government or politician,” he said, “so building resilient partnerships requires looking beyond immediate political tensions.”
MAPFRE Re CEO Miguel Angel Rosa spoke more optimistically, suggesting the industry is well-positioned to handle volatility given its core business of risk management. He acknowledged inflation impacts but suggested the industry is now better prepared after recent experiences
with post-COVID inflation spikes.
The modelling conundrum
Perhaps nowhere is the industry’s struggle with uncertainty more apparent than in risk modelling. Mr Kotak highlighted a clear shift in loss patterns, with $100bn-plus catastrophe years becoming the norm, driven largely by secondary, non-modelled perils. The challenge lies not just in developing better models but in achieving adequate pricing for these risks.
Mr Rosa raised a fundamental question about the economics of emerging risks: with climate change clearly increasing exposures, who will pay for coverage of secondary perils? The gap between technical pricing and market reality remains a critical industry challenge. “As insurance companies struggle to charge retail clients adequately, a broad solution is needed to address the underlying demand equation,” he said.
Mr Puetz challenged the narrative that reinsurers avoid losses, noting that proper underwriting and portfolio diversification by cedants remains essential. “Reinsurance cannot protect flawed business models that fail to charge appropriately for risk or maintain adequate diversification.”
The cyber risk challenge exemplifies these modelling difficulties. Mr Conoscente drew parallels to early catastrophe modelling, when large losses seemed improbable until they materialised. Current cyber models predict losses for which the industry has no validation through actual experience, creating hesitancy despite clear demand potential.
Mr Kotak emphasised that cyber’s primary challenge is demand creation rather than technical modelling. “Not many corporates come up and report these incidents because they are themselves a bit vulnerable to exposure. As insurers we need to work harder to convince more corporates to buy insurance cover, otherwise we won’t be able to close the cyber protection gap,” he said. Industry effort to build awareness and capacity is required.
Mr Takahashi also shared insights from recent Japanese cyber incidents affecting a major brewery and an e-commerce platform, demonstrating systemic interconnections that models struggle to capture. The brewery incident affected not just the victim but also competitors unable to handle displaced demand, whilst the e-commerce attack disrupted medical supply chains across multiple providers.
Allianz SE Reinsurance Global CEO Holger Tewes-Kampelmann urged a focus beyond pure indemnity, emphasising adaptation, resilience and protection. Understanding cyber risks requires going beyond traditional insurance mechanisms to help clients reduce vulnerability fundamentally.
Mr Jones noted the educational gap about the product in the first place: “It’s an educational process and it’s quite far away from where it needs to be... Apart from big commercial businesses, apart from the education process, I don’t know why it isn’t being sold more. If someone came up to me and said, hey, do you want cyber insurance, I’d probably say yes, but nobody has. It’s just not available.”
Regulatory burden and efficiency concerns
Discussion of regulatory challenges revealed deep frustration, particularly around sustainability reporting.
Mr Puetz was particularly candid about European ESG reporting, describing it as tedious and time-consuming with questionable impact. He questioned spending millions on reports that generate little tangible benefit, contrasting this with direct charitable investment. He also highlighted inconsistencies in European sustainability policies, noting the contradiction when governments promote fossil imports whilst restricting insurance support for fossil fuel projects in emerging markets increase. He stressed that effective ESG agenda can only be achieved if there is consistency across all layers of involved stakeholders.
Mr Tewes-Kampelmann suggested sponsoring academic research to quantify the industry’s regulatory compliance costs against actual benefits to end users, potentially providing evidence for regulatory reform.
Leadership, decision-making and talent
Despite these challenges, leaders demonstrated resilience in their approaches to organisational management. “Clarity, communication, clear objectives. There’s a lot of noise out there... Get back to those basic fundamentals in a very complicated world, sort of cut through making it as simple as possible for people to understand where they’re at,” said Mr Riddell.
Mr Rosa stressed the importance of leadership proximity to local teams: “Not only myself, but the rest of the management team keeps travelling around the world. We’re listening to our local teams, spending time with them. They are the ones that have the information that we need at the leadership level to make the right decisions. In the end, I would say that it’s very simple. It’s a matter of common sense, no matter how big your organisation is.”
“My role is not to make every decision, but to ensure the best people and tools are in place to do so,” added Mr. Baertschi. “We aim to empower the local teams, equip them with the right data and tools and let them do their job. The more we do this, the stronger and more capable our organisation becomes.”
Mr Conoscente further acknowledged that decisions must always be made with imperfect data, relying heavily on experience alongside evolving analytical capabilities.
Mr Puetz championed the continued importance of human judgement: “I also think data is important as a starting point, but I still pretty much prefer our human intelligence underwriting decisions because all the data points are imperfect and need to be recalibrated.”
On talent development, Mr Riddell prioritised grit and determination over credentials, seeking self-starters who can navigate complexity.
Mr Tewes-Kampelmann urged broader recruitment beyond traditional industry recycling: “I think we need to expand our recruiting pool. We as an industry can do a little bit better to market our business. We are just not on the radar screen of many people, and especially also those that are talented. I think we as an industry can do a little bit better to market our business.”
Mr Conoscente reflected on how reinsurance talent requirements have evolved from language skills to actuarial expertise to current debates about technical savvy, suggesting the future likely requires diverse teams combining complementary skill sets.
Mr Flandro questioned whether traditional career development pathways remain viable when AI handles tasks that once built foundational experience, wondering if anyone will manually key reserve triangles again as he once did.
Conclusion
The roundtable revealed an industry confronting significant structural changes whilst maintaining its core purpose of providing societal resilience. Geopolitical fragmentation, regulatory complexity, modelling uncertainty and talent challenges all demand attention. However, these leaders demonstrated pragmatic determination to adapt whilst protecting the industry’s fundamental value proposition.
The path forward requires balancing adaptation to new realities with steadfast commitment to core principles that have sustained the industry through previous periods of disruption.
Industry executives gathered at SIRC to discuss how mounting geopolitical tensions and economic fragmentation are reshaping the reinsurance landscape.