Guy Carpenter is pleased to present our 2012 global reinsurance outlook, Catastrophes, Cold Spots and Capital: Navigating for Success in a Transitioning Market.
During this time of market transition, Guy Carpenter believes now is the moment in which the sector needs the best possible information regarding market trends. In publishing this detailed and definitive view, it is our ambition to arm clients with best-in-class market intelligence on our sector’s rapidly evolving dynamics. More than ever, our clients must be confident that their decisions are truly best suited to their circumstances. Knowledge is power. More insight means increased differentiation for our clients in the marketplace and stronger positioning for their success.
Positive Sector Response
2011 was a tumultuous year. Near record catastrophe losses - second only to 2005, catastrophe model changes and a challenging macroeconomic environment put considerable pressure on the industry. Unlike 2005, reinsurers were well prepared for these pressures, and the sector remains fully functional and adequately capitalized. The fact that there was adequate capital to satisfy capacity demands and retain sufficient competition to restrain pricing well below average quotes was testament to three things: First, the resiliency of the reinsurance market, second, the ability of clients to differentiate themselves and third, the ability of clients and brokers to match clients’ needs with the right reinsurer’s appetite. The positive industry response to the difficult events of 2011 was due in part to the strengthening of enterprise risk management practices over the last few years and emphasizes the benefits of effective risk management.
The January 1, 2012, renewals saw a shift in both insurer and reinsurer behavior as they became increasingly sophisticated, implementing more customized approaches to risk assessment and mitigation. We believe strongly that in order to serve our clients’ needs in this shifting environment, we must not only provide the type of analysis laid out in this report but must also convey market insight and advice dynamically during the renewal. Anticipating this, we enhanced our ability to provide brokers with real time, in-depth reinsurer analysis using our proprietary tools, ROLePlay and EuroBench. This allowed us to achieve the best possible outcome by helping our clients understand the shifts in reinsurers’ approaches as they occurred.
2012 will undoubtedly be a challenging year. Guy Carpenter nevertheless believes opportunities exist. It is critical for companies to have access to the right tools to make informed decisions, and we remain committed to providing the reinsurance sector’s most in-depth and timely market insight. You will find many of these insights in this report and I encourage you to contact your Guy Carpenter representative to assist you in applying the information strategically. Guy Carpenter strives to be our clients’ greatest advocate and strategic adviser. We value our collaborative client partnerships so please share your comments, feedback and suggestions.
From all of us at Guy Carpenter, we wish you a successful new year.