“Investors returning or entering reinsurance for the first time will find a stronger market following the 2023 industry reset, and a highly disciplined environment that will now present the opportunity for incumbents, returnees and providers of fresh capital to achieve long-term value,” suggests Neville Ching, CEO of independent Bermuda reinsurance brokerage ReFlex Solutions.
Writing in a recent report, Ching said that the ‘Great Market Reset’ of 2023 changed the reinsurance landscape for the better, with a focus on underwriting profitability and tighter terms and conditions creating a “much-needed change in the market” that led to a healthier and more sustainable trading environment.
“As a consequence of the hard market conditions, the 2023 full year results from the reinsurance sector are expected to be record-breaking – with many combined ratios sitting not just under 100, but down well into the 80s,” Ching observed.
He added that in 2024, the first three quarters are set to be “just as profitable”, setting the tone for the 1/1 2025 renewals.
“The words “stability” and “orderly” have been used to describe negotiations in the run-up to the renewals and this was an accurate and welcome alternative to the frantic and stressful environment experienced last year,” Ching said.
He noted that now, investors are providing more capacity as “confidence returns” to the reinsurance market.
Ching continued, “Investors returning or entering reinsurance for the first time will find a stronger market following the 2023 industry reset, and a highly disciplined environment that will now present the opportunity for incumbents, returnees and providers of fresh capital to achieve long-term value.
“Meanwhile, Lloyd’s of London has opened the door to more investors via more flexible initiatives such as London Bridge, the Standards Board for Alternative Investments (SBAI), and Syndicate-in-a-Box.”
According to Ching, the overall 2024 outlook is positive for the reinsurance sector, particularly for investors who have been calling for a more secure and profitable environment.
“The industry-wide reset has created a more sustainable market with long-term relevance and new opportunities,” he concluded.
