The trends outlined in Guy Carpenter’s January 1 renewal report continued through the first six months of 2015. Guy Carpenter’s observation that buyers were purchasing more catastrophe limit to take advantage of lower costs, continued to be borne out and even accelerated. The increased demand for reinsurance and expansion of tailored coverage persisted through the April, June and July renewals.
The increased demand for reinsurance comes amid expansion of customized coverage with clients continuing to seek access to innovative new products and improved terms and conditions. Clients continue to evaluate the effectiveness of their reinsurance purchasing to determine if there are more cost effective and efficient means to reinsure risk. In many cases this may include consolidation in purchasing within or across lines of business, inclusion of new lines, modification of coverage definitions and evaluation of multi-year contract terms.
Capacity affords us the opportunity to develop new solutions for new risks and consequently, drive growth, enabling the industry to provide cover for risks that are currently uninsured. As (re)insurers are challenged to find growth in this rapidly changing market, the need for unbiased and agnostic customized advice and services is growing. Our clients are increasingly looking to Guy Carpenter for unique ways to support their expansion into new geographies and distribution channels, development of innovative new products and evaluate the marginal capital impact of strategic alternatives.
At this point in the year as the majority of 2015 renewals have now completed, Guy Carpenter has developed this Mid-Year Review to present an assessment of industry trends. Additionally, within the report we offer insights on other factors and developments that offer opportunities for growth, such as public-private initiatives, emerging risks and regulatory changes.