GC’s Rousseau: Milton-Helene impacts and inflationary pressures to dominate Baden-Baden talks
Discussions at this year’s Baden-Baden Reinsurance Meeting will likely be driven by the fallout from recent US hurricane activity, as well as European secondary peril impacts and ongoing inflationary pressures, according to Guy Carpenter’s Laurent Rousseau.
Speaking to The Insurer TV ahead of this week’s event, Rousseau said hurricanes Milton and Helene would likely be "the number one topic", highlighting uncertainty over the direction reinsurance pricing will take.
Rousseau, who serves as CEO of EMEA and global capital solutions at Guy Carpenter, also highlighted inflation as a major talking point given its impact on multiple sectors.
"Inflation impacts not just casualty, but also motor," he said. “The focus at Baden-Baden is expected to be broader than the US, considering how long-tail lines of business globally have been impacted by insurance-specific inflation.”
He said secondary peril impacts in Europe are also on the radar. "Smaller, less-modelled events … have been eating into cat programs," Rousseau said, pointing to heightened risks in countries such as Greece and Italy.
Rousseau stressed that the European market has been slower to react than the US in terms of pricing dynamics.
Turning to the booming cat bond market, Rousseau painted an optimistic picture for 2025.
"The property cat bond market has been extremely resilient and buoyant," he said, noting that the number of outstanding issues continues to rise. With the possibility of expansion into new classes including casualty and political risk, Rousseau said the growth in cat bonds remains a hot topic in renewal discussions.
When asked about the theme of this year’s Guy Carpenter Baden-Baden Reinsurance Symposium – Partnering through crises and cycles – Rousseau offered a pragmatic view.
"Shocks are our raw material. This is what we do," he stated.
While acknowledging the challenges faced by the industry, he dismissed the notion that uncertainty is a new phenomenon. "Every generation thinks the same … I don’t buy into that narrative."
Rousseau’s insights set the stage for what promises to be an event dominated by discussions on how the industry can manage inflation, catastrophe risks and renewals in a rapidly changing landscape. "Engagement and face-to-face discussions are key," he stressed, highlighting the importance of proactive negotiations over posturing.
With record cat bond issuance and a growing focus on innovative solutions for frequency risks, the market’s future remains dynamic.
As the industry gathers at Baden-Baden, reinsurers and cedants alike are preparing to navigate the complexities of the current environment. "It’s not a battleground – it should definitely be a common ground," Rousseau concluded.