There is nothing new about reinsurers operating in the primary market, but the advent of new technologies and big data has changed the rules of the game, according to Insurance Day’s Rasaad Jamie.
“When AM Best recently issued its Top 200 US Property/Casualty Writers report for 2018, the most notable thing about the survey was the increase in the market share held by primary insurance subsidiaries of reinsurers over the course of last year.”
Such developments have changed the landscape for primary insurers. BLM energy partner and reinsurance expert, Sarah Drury believes that significant consolidation in the primary market and among broking houses “has opened up the market and facilitated reinsurers’ access to the primary market, as their repositioning enables them to satisfy their customers’ demand for a wider choice of carrier.”
Rassad goes on to say that a “key development here is the increase in the purchasing of facultative reinsurance by the primary insurance market in recent years. For reinsurers it is an expense-heavy route to market...” As Damian Cleary, BLM’s head of London Market and reinsurance points out, “for them, what is the difference between facultative reinsurance and direct insurance? More cost, more administration and less control of claims…”
Click here to read the article in full in which Sarah and Damian give further views on the advent of new technologies and big data, in addition to other risks for reinsurers moving into the primary market (subscription required).
