A final concern that was discussed related to cybercrime . Alex van Dijk , president of U . S . branches at Guy Carpenter , raised the point that , geopolitically , it is not just criminals but also governments that are involved in creating adverse cyber events and Hamm suggested that there may be a need to create a public backstop to back up private cyber insurance markets . •
MARKETPLACE
APCIA REPORT ON REINSURANCE MARKET recap written by Dave Evans , Aatrijk
Reinsurance is a critical component of the insurance ecosystem and its impact on the hard market was an ever-present theme at the APCIA conference . The 2023 reinsurance market ’ s footprint has impacted pricing and policy limits and generated more underwriting restrictions , including companies exiting entire lines of business .
The reinsurance session analyzed the effects of inflation , social inflation , climate change , cybersecurity attacks , geopolitical instability , and other emerging risks on the reinsurance marketplace , and asked : What does the reinsurance environment look like ? Where is it going ? How long will it last ? And what is different about this hard market cycle ?
During the session , Kerri Hamm , executive vice president of business development for Munich Re U . S ., shared her view that the reinsurance market in general was not getting adequate returns on invested capital and there was a need for a reset in pricing and structure . She also noted how higher interest rates have increased the cost of capital relative to the risk-free rate of returns that the bond market now provides , and that legal system abuse has had an impact on casualty reserves . She also emphasized the impact of the regulatory environment , particularly in California , which does not allow for reinsurance costs to be passed along in insurance company rate filings .
Meanwhile , Molly Tully , managing director of Aon Reinsurance Solutions , stated that currently , reinsurance capacity is an issue , and a key reinsurance objective is to arrive at stability in pricing and terms .
The panel ’ s consensus is that certain lines of business , such as workers compensation , are fairly stable but overall the hard market will be around at least through the second half of 2024 . However , what impact climate change and “ nuclear ” jury verdicts will have on reinsurance remain open questions .
A final concern that was discussed related to cybercrime . Alex van Dijk , president of U . S . branches at Guy Carpenter , raised the point that , geopolitically , it is not just criminals but also governments that are involved in creating adverse cyber events and Hamm suggested that there may be a need to create a public backstop to back up private cyber insurance markets . •
Dave Evans , CFP CRPS RICP , is a senior associate with insurance marketing firm Aartrijk , based in Fairfax , Virginia . He formerly worked for Big I as an SVP and Publisher for almost 20 years .
54 KANSAS INSURANCE AGENT & BROKER