As we navigate these changes, effective communication is paramount. In a landscape of uncertainty and change, the importance of maintaining transparent and robust lines of communication with our valued clients and brokers cannot be overstated.
In an era when the reinsurance market is experiencing profound shifts and unexpected challenges, the role of clear and honest communication emerges as a cornerstone for success. As we approach the renewal season, I am reminded of this yet again. Timely discussions about our expectations and objectives are essential to identify and seize opportunities effectively.
Reflecting on the aftermath of the previous renewal cycle, a level of disorganization and last-minute decision-making in the market resulted in heightened uncertainty, benefiting no one. In a time marked by substantial change, a policy of transparency is indispensable. By communicating our perspectives early, we offer brokers and clients the time they need to adapt. This candid approach is the cornerstone of building trust over time, which is crucial in the partnership between cedant and reinsurer.
Prominent reinsurance conferences like the Monte Carlo Rendez-Vous de Septembre present an ideal platform for engaging in focused conversations with individual clients. These discussions revolve around upcoming renewal needs, capacity availability, trends, and the evolution of strategies. While flexibility is key, our commitment as a dependable partner remains unwavering.
Given the historical backdrop of subpar returns in the reinsurance market and the mounting uncertainties within the risk landscape, the call for sustainable reinsurance structures and terms and conditions is now more resonant than ever before.
In the past and in years without significant market events, the topics at these conferences were limited to specific client needs and maybe some general posturing about price movements. Structures and wordings have been less of a focus. However, the discussions have now firmly and rightly shifted to encompass changing structuring, higher retention levels, and the refinement of terms and conditions language.
The market is shifting – now it’s time to shape it together
As the market landscape continues to shift, tough decisions are inevitable and will continue to have to be made. Retention levels, pricing adequacy and coverage will remain in focus. Further increases and tightening will be required in some areas. Communicating these shifts in risk appetite and product line strategies to our clients with transparency is paramount.
The evolving reinsurance landscape also means that we need new and better data points to evaluate risk. Aside from communicating on risk appetite, the reinsurance market also needs to continue clearly laying out its requirements for more and better data points, and to ensure seamless information flow across all stakeholders.
Climate change – an example of collaboration towards a future risk model
How the market is handling climate change is a positive example of what can be achieved through collaboration and effective dialogue. By acknowledging the emergence of non-modelled losses stemming from climate-related events, the industry has incorporated a broader perspective into the reinsurance conversation.
The communication challenge of the future reinsurance paradigm
Looking ahead, the future reinsurance paradigm calls for a partnership where all parties align their understanding of coverage, risk appetite and objectives through clear and timely communication, supported by a robust, data-driven information exchange. In an environment where adaptability and creativity are pivotal, client and broker relationships should be anchored in transparency, reliability, and trust.
At LM Re, our experience equips us to guide partners through a range of challenges across various product lines and markets. We are well positioned to navigate the transition with the agility to act quickly and the expertise to develop solutions for our clients.