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Howden Re has reported a moderation in pricing within the property-catastrophe reinsurance market, following rate increases in 2022 and 2023.

The average risk-adjusted property-catastrophe reinsurance rates-on-line was 5% lower than usual – typically ranging from -7.5% to -2.5%, it stated.

According to its report, the reinsurance market has been facing a period of adjustment, partly caused by resurging dedicated sector capital that exceeded the levels seen in 2021 along with strong ILS inflows. This led to an increase in capacity at the top of programmes, leading to risk-adjusted rate reductions in the higher layers.

“It is crucial that our clients secure optimal coverage in this rapidly evolving landscape. This means not only finding capacity, but also ensuring it aligns with their risk profiles and financial objectives,” said Howden Re head of North America Wade Gulbransen.

“Our focus remains on providing innovative thinking alongside dynamic placement strategies to meet these challenges head-on,” he added.

The report noted an increase in activity and competition in the ILS market. As larger carriers in Florida were more active in the issuance of catastrophe bonds, the supply in higher layers increased and led to the significant growth of the assets under management of capital providers.

A shift in focus on property risks by some reinsurers followed the strong performance seen in 2023 as there were several reinsurers that reported some of the best financial results that they had experienced in decades, with regards to combined ratio, return on equity, and economic value added.

This increase in ILS interest reflected a trend in the broader market when it comes to diversified alternative risk transfer mechanisms, which offered reinsurers and cedents more options in managing their exposures.

However, factors such as the 2024 hurricane season can exert short-term rating pressure on the market as the weakening El Niño and the heightened chance of La Niña occurring may entail stronger storms, thereby underscoring the inherent market volatility as well as the need for more strategic resilience.

“The reinsurance market is at a critical juncture. While the recovery of dedicated capital and increased capacity signal a potential softening of rates, the forecasted active hurricane season and other market pressures could counteract these trends. Strategic adaptability and expert guidance are essential in navigating these dynamics,” said Howden Re head of industry and strategic advisory David Flandro.

Howden Re is the reinsurance and strategic advisory arm of Howden.

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Specialist reinsurance broker Miller has announced its acquisition of Bruzon Correduría de Seguros y Reaseguros S.A. and Bruzon Services S.A. (Bruzon), a commercial insurance and reinsurance broker based in Madrid.

The transaction is part of the Miller’s continued expansion of its specialty boutique model. Miller CEO James Hands expressed his enthusiasm for the deal.

“This is an exciting time for Miller as we continue to expand our presence across the UK, Europe and Asia. Bruzon has an outstanding reputation in Spain and shares our vision to create the broker of choice for clients with complex risk-transfer needs and for talented brokers to pursue their passion,” said Hands.

“Together we can broaden the spectrum of solutions and services available to our global clients,” he added.

With the acquisition, Bruzon will rebrand to “Bruzon Miller”, which acknowledges the partnership between the two firms as Miller has been a minority shareholder since before 2015. Bruzon’s staff will still be led by Bruzon founder, chairman, and CEO John Bruzon. They will be collaborating with Miller’s staff from the UK, Asia, and Bermuda as well as the broker’s European insurance markets which include France, Belgium, and Switzerland. 

“We are delighted to join Miller as the next step of Bruzon’s journey. This transaction will advance our own presence in the Spanish market, continuing to provide our clients excellent advice, solutions and service,” said Bruzon.

“With Miller’s ownership and increased resources, we preserve the legacy and strengthen the special character of our company,” he added.

Bruzon is one of the leading insurance and reinsurance brokers in Spain. With its clients being large banks, insurance firms, large corporates and IBEX 35 members, the broker offers solutions in facultative reinsurance, accident & health, sports, financial lines, and credit and surety insurance. Meanwhile, boutique consultancy firm Bruzon Services is focused on financial advisory and structuring. 

With its completion expected to occur sometime this year while being subject to regulatory approvals, Miller’s transaction with Bruzon serves as the broker’s second acquisition in Europe. 

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In his role as partner and global insurance leader at PwC, Jim Bichard (pictured) oversees a team of some 15,000 professionals serving insurance clients across 100-plus countries on a daily basis. It’s a role that has helped him develop a unique point of view of how the sector has evolved, where it stands today – and what the future holds for the insurance market.

Digging into some of the key pain points he sees facing insurance businesses, Bichard looked to PwC’s most recent ‘Insurance Banana Skins’ report and its finding that insurance companies are being exposed to a plethora of macro-economic and geopolitical risks.

What’s pressing on insurance companies today?

Interest rates, inflation and geopolitical conflict are just some of the risks having either first or second order impacts on insurance companies today, he said. Meanwhile, as part of a regulated sector, insurance companies are grappling with increasing complexity.

“Technological disruption and climate change are risks that continue to move up the register,” he said. “Scenarios such as cyber are creating risks; and given the amount of reliance on data across the whole of the insurance market, it’s no surprise that data protection and cyber is high on the agenda.

“Climate is a risk that continues to grow and grow in terms of its impact on the operations of an insurer, its balance sheet, the products it creates and distributes, and the investments that it holds. It’s very pervasive.”

The other challenge that PwC is championing greater understanding of across the market, is the trust gap that exists in today’s insurance ecosystem. A core part of the insurance offering is the need for insurance companies to be trusted and resilient, he said, and crucially, to make good on the implicit promise of insurance – that it will be there for customers in their hour of need.

“Generally speaking, trust in financial services hit a really low level during the pandemic. So, the insurance industry has a lot of work to do to improve trust among the public and its customers,” he said. “It’s hard to assess this risk without looking at the impact of digital and AI which is impacting all parts of the operations of insurance companies.

“Part of that is around customer preferences and the fact that these are changing really rapidly. Individuals and corporate customers are used to being able to access other areas of financial services digitally. They are also now raising questions about why insurance is a one-year product, about the potential for usage rather than loss-based products, and about why insurance hasn’t moved to be more preventative and protective.”

Balancing performance with navigating external market conditions

Bichard highlighted that, overlaid across all these factors is an emphasis on performance.

Insurers have got to remain profitable, and ensure that premiums exceed their claims, he said, which is no mean feat in today’s environment. Performance across the global sector has been quite tough, certainly up until last year, so these companies are facing juggling those performance demands and meeting their investors’ requirements while dealing with macro factors, some of which are manifesting now and some of which are poised to be even greater challenges down the line.

“We do a CEO survey every year, and one of the most interesting questions posed is whether they think their business will be viable or sustainable in five-to-10-years time,” he said. “This year, we had a record response of 45% of CEOs saying they do not think their business will still be viable in five to 10 years. And that’s just as high for insurance as for any other sector. So, what does that look like? Because five years is not a long time in which to reinvent your business.”

How have the challenges facing insurers evolved?

Having started in insurance in the mid-90s, Bichard has seen for himself how the challenges facing the market have – and haven’t – evolved over the years. What is clear, he said, is that the surrounding risk landscape has never been quite as complex as it is today. Whether that’s translating into increased riskiness is hard to say for certain, but there is certainly more complexity.

A large part of this is due to the new risks which have emerged over the last decade, he said – the increasing complexity of the market is making accurately pricing risk harder than ever.

“That pace of change is only accelerating,” he said. “It calls to mind that quote about how digital technology has never been as fast, and will never be this slow again! We’re really only just wrapping our heads around the fact that we’re in a surge right now and, until that calms down, the industry is going to get more and more disrupted.”

Insurance, in theory, has always been a data-driven industry, he said, as it involves looking at historical performance or loss experiences and using that to price risks, and effectively predict the future. The computing power and the availability of data and, as a result, insurers’ ability to model and run simulations is now in a completely different space, with things that would otherwise have taken months or years to do, now happening almost instantly.

“Interestingly, it hasn’t made us significantly more profitable,” he said. “The industry is not, as a result, in a position where it never has a loss-making year because competition is still there. But data and the ability to use analytics and modelling and computing power – and particularly how Cloud is really just starting to have an impact on that – is an important consideration.”

Jobs will be optional for humans in a “benign” AI future imagined by Elon Musk.

The Tesla CEO, who spoke at the Viva Technology 2024, told the audience that that future is the most likely scenario with artificial intelligence.

“In a benign scenario… probably none of us will have a job,” Musk said, who spoke to the audience remotely via webcam. “Any job that somebody does will be optional.”

In this scenario, he said there will be universal high income, while AI and robots will provide any goods and services for the public.

“If you want to do a job as kind of like a hobby, you can do a job,” Musk stated. “But otherwise, the AI and the robots will provide any goods and services that you want.”

According to Musk, the question in the benign future will be the role of humans given that computers and robots will be able to everything that they can.

“I do think there is perhaps still a role for humans in this in that we may give AI meaning,” he said.

Having played a pivotal role in coordinating the operational side of acquisitions development, as well as dealing with information systems for strategic analysis, Ritesh Behl (pictured), chief operating officer for North America at Acrisure Re, believes success lies in collaboration. Despite initially struggling due to his self-proclaimed perfectionist nature, Behl has come to recognize the importance of collaboration as the cornerstone of success in his role.

“[It all comes down to] a team-based approach,” he told Re-Insurance Business. “I’ve been fortunate enough to work in an organization that has a culture and structure that’s very conducive to people working together. That’s what we pride ourselves on. However, it took some time for me to understand how to be effective in that environment – because I tend to be a perfectionist.”

Behl was quick to point out that he used to be very particular about the way he’d liked things done – in order to be fully confident that they were being done “correctly” from his point-of-view.

“But you start to realize that that when you delegate you learn how to trust people – how to empower those around you – and you quickly realize the greater potential that can come from that,” he said.

Getting communication right

Effective communication stands out as another cornerstone of Behl’s strategy for ensuring operational efficiency. The belief that open and frequent communication can alleviate most problems is central to his philosophy.

“Even though there are competing priorities in a lot of different areas, once you have open communication across teams and the organization at large, it fosters that environment of people working together. Issues being worked out rather than just being delayed – or [things] slipping through the cracks.”

From the moment Behl stepped into his role, he embraced Acrisure Re’s ethos of approachable leadership. This foundational element has played a pivotal role in his journey from being a newcomer to becoming a leader himself.

“From the day I joined this company, I’ve been fortunate enough to have strong supportive managers who have lifted me up throughout my tenure here,” he told Re-IB. “They’ve given me the opportunity to grow. I now try to instill those same values in my leadership style to empower people and teams around me.”

Broking workshops

This philosophy extends beyond internal operations to how Acrisure Re interacts with its clients, always emphasizing transparency and honesty. It was Behl’s innovative spirit that ultimately led to the inception of workshops aimed at bridging the gap between the company’s broking and operations bands.

“We held these workshops [involving] team building exercises, strategy sessions and roundtable discussions,” he said. “It was a way to promote collaboration and communication [as well as] build a rapport between the global teams.”

The success of these workshops has been evident, not just in smoother internal processes but also in the enhanced service offering to clients. The idea that fostering a closer connection between teams leads to better client outcomes is a testament to the company’s forward-thinking approach.

“There’s a tendency in our industry for broking teams to toss deals over this imaginary fence,” said Behl. “It goes from the broking table to the back office for processing. But they don’t really talk to each other as much as they should. So, what we wanted to do was create a greater connection, because when we develop this relationship, it leads to not only better processes internally but ultimately benefits our clients.

“We’re in the service industry – we’re trying to make sure that the product and the service we’re offering to our clients is exceptional. The interesting thing we found when we held our first workshop was that new ideas and efficiencies emerged. In fact, this was so effective that many of our global teams are now holding similar workshops every year.”

Despite the investment these workshops require, Behl and his team view them as essential to the company’s ongoing success. The initiative has proven so valuable that it’s seen as an investment in the team’s development and the quality of service they provide.

In a notable victory against organised fraud, car insurance broker 1st Central and insurance law firm Keoghs have won five tort of deceit claims against a fraud ring, resulting in over £140,000 in damages awarded.

The policy hijack scam involved alleged at-fault accidents occurring far from the policyholder’s address, claimants (the supposed driver and passengers of the third-party vehicle) also residing long distances from the collision site, and a single individual reporting multiple incidents.

Partnering with Keoghs, 1st Central initiated proceedings in the tort of deceit to recover the funds paid out on the false claims. The claims advanced to trials at Manchester County Court, where the judgments favoured 1st Central and awarded both compensatory and exemplary damages.

Meanwhile, the credit scores and insurance premiums of those customers whose policy information was used in the scam will not be impacted.

“1st Central is committed to rooting out fraud and protecting our customers,” counter fraud director Paul Priestley stated. “False claims like this ultimately push up costs for everybody, with genuine, paying customers often suffering as a result.

“To keep our prices competitive and ensure that customers feel safe and valued with us, we invest heavily in anti-fraud capabilities and always take decisive action against potential scammers.

“The recent judgments in our favour vindicate this approach and represent big wins for 1st Central, the wider industry, and our customers against potentially fraudulent actors.”

Sarah Moat (pictured) from Keoghs added: “This is a fantastic achievement and resulted from excellent teamwork between Keoghs and 1st Central.

“We will continue to ensure that policyholders are protected from insurance fraud by working diligently to spot incidences of fraud and then use the full power of the courts to ensure fraudsters are brought to justice.”

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Investment bank Moelis & Co. has been appointed to review reinsurance backer 777 Partners LLC’s portfolio of football teams, raising new questions on the future of the multi-club owner.

New York insurance company Advantage Capital Holdings LLC, a major lender to 777, has appointed Moelis, which will evaluate potential options for 777’s football holdings including possible asset sales, according to people with knowledge of the matter, as reported by Bloomberg.

A-Cap’s loans to 777 are secured against some Miami-based investment firm’s assets.

The investment company’s football assets include Brazil’s Vasco da Gama, Italy’s Genoa Cricket and Football Club, Germany’s Hertha BSC, and France’s Red Star FC.

777 is trying to acquire football club Everton FC, but the deal has been dogged because of financing problems and scrutiny of 777’s management of its businesses.

Earlier this month, 777 dealt with accusations from lenders such as Leadenhall Capital Partners that Josh Wander, the investment firm’s co-founder, double-pledged assets as collateral.

In a lawsuit, Leadenhall said A-Cap had been so entangled with 777 that the lender was able to block 777’s efforts to restructure loans to other lenders.

A-Cap was owed over $2.2 billion by entities affiliated with 777 at the end of 2023, Bloomberg said citing the lawsuit filed in New York.

So far, A-Cap has rejected any ownership ties to the Miami-based investment firm.

The lending company’s appointment of Moelis is expected to highlight 777’s finances and could cast doubt not only over the Everton deal but also its status as a leading football club owner.

Currently, deliberations are at an early stage, and it is uncertain if they will result in the sale of any 777 football asset, the people with knowledge on the matter said.

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The health and pharmaceuticals sector will take the hardest hit from the adverse effects of artificial intelligence (AI) over the next 10 years, according to a new report from Swiss Re Institute.

The research studied the emerging risks surrounding AI in 10 industries, exploring the probability and severity of AI-related loss incidents due to cyberattacks, data bias, and algorithmic and performance-related risks, among others.

While the IT services sector will be most affected by AI risks, that is set to change as technology use becomes more widespread across all industries like mobility and health, said Christoph Nabholz, chief research and sustainability officer of Swiss Re.

“Insurance companies are therefore starting to introduce specific cover for AI performance failures – one of the biggest risks for all industries,” Nabholz noted.

The Swiss Re report explained that the risks are also rising and consequences can be serious or even fatal as the health industry continues to use AI technology to streamline patient monitoring, administration, diagnosis and drug development, among other functions.

Flawed or biased AI algorithms could result in negative effects such as misdiagnosis, leading to serious illness or even death.

The adverse effects of AI technology over the next decade will also affect other industries, such as mobility and transport, as well as energy and utilities, which rank second and third respectively. 

Swiss Re said the mobility and transport sector will be highly exposed to the risks of AI largely because of the use of AI-powered connected and automated driving, posing challenges in highly diverse urban places. 

Meanwhile, the energy sector will also use AI extensively because the ongoing net-zero transition requires electrification and the creation of smart grids.

Pravina Ladca, group chief digital and technology officer of Swiss Re, said that there are also risks that can lead to potential vulnerabilities despite AI’s benefits for a broad range of industries.

“Given its role as a shock absorber, the re/insurance industry has an important role to play in addressing AI-related risks and helping build the digital trust needed to harness the full potential of such emerging technologies,” Ladva noted.

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Consilium, Aventum Group’s global specialty reinsurance broking business, has launched its new marine division and appointed Thomas Noakes as senior partner.

Starting in June, Noakes will work at Consilium after serving his notice period at Price Forbes & Partners, where he was an associate director.

He has been in in the industry of understanding the challenges faced by marine businesses and cargo owners, bring to the role 13 years’ worth of experience in placing specialty international marine risks such as hull and machinery, protection and indemnity, charterer liabilities, and marine cargo insurance.

The new marine division of Consilium is expected to deliver unrestricted access to A-rated Lloyd’s and London market carriers, as well as specialist marine markets in Asia, Latin America, Europe, and the Middle East.

Consilium said the division is “highly nimble by design” to provide differentiated solutions tailored to the needs of individual clients and the nuances of the regions they operate in.

The reinsurance broking business said it will act “quickly” to create and deploy solutions, providing the necessary clarity during times of heightened uncertainty like increased geopolitical tensions and disruptions in supply chain.

Consilium is also providing solutions to tackle the fallout from the Baltimore Bridge collapse, which it said is expected to be the “most expensive maritime incident” for reinsurers in modern history.

Consilium co-CEO and managing partner Paul Richards commented on the division’s launch and Noakes’ appointment, saying that broadening the company’s range of expertise in the marine market was a “natural step” to being the “most inspiring independent specialty broker” globally.

“Thomas will be a key player as we build out our division, thanks to his expertise, dynamism, and strong commitment to client service,” Richards said in a statement.

He added that consolidation had eroded the remaining options for clients while service has suffered, noting that “these are incredibly exciting times” as the company delivers outcomes for marine customers.

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When Toby Gorman (pictured) was tapped to join Aventum Group’s international broking arm Consilium, he was welcomed for bringing “strong connections in Lloyd’s and other markets, and strong relationships in the MGA and coverholder space”.

Having been a specialist in delegated authority business for over 25 years and held senior roles at Arrow Risk Management, AXIS Capital and Novae, he joined Consilium’s Delegated Risk Solutions (DRS) business as partner in March 2023. Joining the team was a natural next step for him, he said, not least because of the reputation of the DRS team within the Lloyd’s and London markets, its employee-owned and debt-free structure, and entrepreneurial culture.

What’s happening in the coverholder market today?

It’s an interesting time for the coverholder market, which is facing a number of core challenges, including those related to data. There’s no shortage of opportunities for MGAs through innovation and expanding into new markets, he said, but there is a tangible lack of data, which is a real stumbling block when it comes to carriers progressing, making it difficult for new MGAs and startups.

“Coverholders need the capabilities to handle, analyse and action vast amounts of data for improved decisioning if they are to differentiate based on expertise, innovation, and value-added services,” he said. “The complex and ever-evolving global regulatory landscape and compliance costs remain a challenge. 

“Coverholders must invest in reducing the administrative burden and improving operational efficiency via automation and digitisation. However, there’s always a flip side of course. With increasing digitisation, coverholders are exposed to cybersecurity threats and must therefore up their game in terms of mitigation and prevention measures.”  

What opportunities are shaping the market?

When it comes to opportunities, he said, customers desire more user-friendly, comprehensive, and tailored insurance products and MGAs are perfectly placed to lead from the front in delivering them. Coverholders can differentiate by developing innovative insurance products tailored to evolving customer needs and emerging risks, such as cyber insurance for businesses or parametric insurance for natural disasters. 

“[In addition], collaborating with insurtechs, reinsurers, and other industry stakeholders can provide coverholders with access to new technologies, distribution channels, and expertise,” he said. “And of course, harnessing the latest advancements in technology, such as artificial intelligence, machine learning, and blockchain [can] offer innovative solutions for improving underwriting accuracy, risk management, and customer experience.”

Where do MGAs and MGUs require the most support

Identifying some of the critical areas in which MGAs and MGUs require support when navigating the current environment, he noted that these businesses often require support in areas such as technology adoption, data analytics, risk management, compliance, portfolio diversification, and accessing specialised expertise and markets. Getting on the front foot across all these areas can help them navigate the market more effectively and stay ahead of the game.

Support in terms of accessing carrier partnerships, negotiating favourable terms, and diversifying their portfolio, as well as developing innovative insurance products tailored to evolving customer needs and emerging risks is essential to staying competitive, he said.  

“This is why DRS has experienced such rapid growth,” he said. “We can provide coverholders with access to A-rated carriers in both the Lloyd’s and London markets. Once capacity is secured, we deploy our deeply experienced technical, digital, and actuarial teams to assist with ongoing profitable binder management, and the tailoring of innovative schemes and facilities that drive growth.

“We’re pushing the technology boundaries, bringing together, for the first time, actuarial insight and global re/insurance expertise in capacity sourcing and binder management. This means we can push even harder on the limits of what’s possible.”

Where does the market go next?

Offering his take on the overall health of the coverholder market, Gorman is “absolutely optimistic” about where it goes next. Despite challenges, he said, there are plenty of opportunities for growth and innovation and with the right strategies and adaptability, the market can continue to thrive and provide valuable insurance solutions.

Several factors contribute to Gorman’s optimism. He highlighted how market growth is presenting opportunities for coverholders to tap into new markets, diversify their portfolio, and expand their business.  The pace of innovation is constantly offering exciting new ways to enhance offerings, improve operational efficiency and support growth ambitions, he said, as is an increased willingness to embrace cross-industry strategic partnerships. 

“Coverholders are also increasingly focusing on delivering value-added services, personalised experiences, and innovative insurance solutions tailored to customer needs,” he said. “And finally, despite facing challenges such as natural disasters, economic downturns, and global pandemics, the coverholder market has demonstrated resilience and an ability to adapt to changing market conditions, manage risks effectively and innovate in response to emerging trends. 

“The future is bright.”