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WELCOME!
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The Reinsurance Interest Group is one of the 14 interest groups within the CPCU Society. Our purpose is to interact with and support a network of CPCU’s working in reinsurance. We can discuss common interests, concerns, share successes, discover new ways to apply knowledge, and find outlets for creativity and growth. All interest group members have access to one another through this website, the RISE newsletter, by attending the Society's Annual Meeting and Seminars (and especially the sessions hosted by this interest group) and by attending other educational symposia that we sponsor.
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Feb. 4 Reinsurance Workshop Recap |
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On Feb 4, 2010, the CPCU Reinsurance Interest Group held a ½ day state of the reinsurance market workshop at the DLA Piper law offices in downtown Chicago.The workshop drew approximately 50 attendees from various walks of the insurance market and was held in conjunction with a luncheon sponsored by REACH (Reinsurance Education And Communication Hotline) and Association of Lloyds Brokers.
The first session was presented by Holly Spurlock and Kevin O’Scannlain from DLA Piper law offices. Their presentation focused on legislation affecting the insurance and reinsurance industry. Discussion focused on financial regulatory reform’s key players in Washington, systemic oversight, capital requirements, consumer financial protection agency (CFPA) and credit agency reform. The overall feeling from the audience was that the property and casualty industry fared relatively well in these trying economic times. Thus the hope was legislators would not place the industry in the same mold as other financial institutions.
The second session was a panel discussion whose participants included James Wilcox, Senior Vice President –Swiss Reinsurance Company, Susan Kelly of CNA Reinsurance Operations, Bruce Kukowski of Maiden Reinsurance Company and Charles Desmond of BMS Intermediaries, Inc. A series of five probing questions were asked regarding the panel’s general impressions of the 2010 treaty year; the 2010/2011 outlook; the perception of buyers, brokers, reinsurers during this time of economic turmoil; cause/impact of soft casualty pricing; and the impact of consolidation in the market. Factors in the discussion were the lack of nationwide catastrophe activity, continued abundance of capital in the marketplace, and difficulty of managing an industry that demands short term returns on long-tail products. The overall feeling was the recent renewal cycle was relatively calm and that this will continue through 2010, barring some catastrophic event. In relation to the topic of soft casualty pricing, it was hoped the market may eventually see the wisdom of building enough reserves to account for events billed as casualty catastrophe losses (such as the next mold, asbestos or silica crisis).
The panelists also felt that industry consolidation and reorganization, while a fact of life, continues to impact the market. From various perspectives, there was a feeling that too few players could lead to leveraged situations that could stifle creativity and innovation. In addition, the loss and/or shifting of valuable human intellectual capitol that comes with such activities could prove detrimental in the next few years.
The REACH luncheon speaker was Kevin Williams of General Reinsurance Corporation. His presentation covered key drivers of the reinsurance market: historical property and casualty underwriting results, return on invested assets and industry net income/return on equity. Kevin felt while the environment is relatively benign today, perhaps the industry faces the prospects of inflation (brought about by $787 billion in stimulus funds) in the near future. He stressed that buyers of long-tailed lines of coverage need to consider the prospect of inflationary pressures with in their business plans.
The overall feeling from the event was the reinsurance industry was able to reload capitol in a tough economic environment and a relatively catastrophe free 2009, but challenges lie ahead in rate adequacy and inflation. If capitol is lost due to a major event, will companies find it easy to shore up balance sheets in these trying economic times?
Panel speakers (L to R): James Wilcox (Sr. VP Swiss Re), Charles Desmond (BMS Intermediaries, Inc.), Susan Kelly (CNA Reinsurance Operations, Bruce Kukowski (Maiden Re)
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Feb. 4 Reinsurance Workshop Recap |
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(1) Holly Spurlock and Kevin O’Scannlain, DLA Piper; (2) Tom Pavelko, Reinsurance Interest Group Chairman; (3) Eric Hubicki, BMS Intermediaries, Inc., and emcee of the event
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