Nat cat in Europe: a market focused on disaster mitigation

Julien Mollinier, president of EMEA at TransRe, discusses the challenges and opportunities across the European property and casualty markets.

What do you anticipate will be the hottest discussion points in Baden-Baden this year?

It has been an eventful year so far, with recent floods in Central and Eastern Europe and Italy, on top of earlier flooding in Germany and Dubai. If we include the earlier Italian hailstorms and the loss creep into Q1 2024, it has been difficult for reinsurance portfolios to make their expected returns, despite the notable improvements in reinsurance pricing and structures over the last two years.

The past five years have challenged reinsurer profitability. Our industry response needs to be multi-faceted, forward-looking and courageous and we expect to have extensive discussions with our partners as we navigate continued elevated natural catastrophe loss activity.

How does the US casualty market, with more frequent and severe jury awards, impact European insurers?

Europe’s casualty market has different challenges than those affecting the US, but it is not immune to US issues. Many European insurers write global covers for their European clients that have US operations. European carriers need to deploy capacity very carefully on those multinational accounts.

Some insurers are clearly aware of the issues and have lowered their limits on US-exposed business. Others have seized the opportunity to grow and gain market share. We support those with sensible deployment strategies.

How will the recent floods change European property insurers’ buying requirements and reinsurer appetite?

The floods have shown the value and effectiveness of flood defences, especially in Austria where they significantly mitigated losses. Hopefully this inspires other countries to invest in and upgrade their flood defences.

Still, this is a significant, wide-ranging event and we expect current market loss estimates to rise over time. Many territories have been affected and floods often come with loss creep. We expect demand for flood capacity to increase. We are already seeing more protection being bought in Germany, where flood is now a primary peril. We also anticipate investments in risk prevention and mitigation to gain momentum.

What challenges do you see in the EMEA market?

European insurers buy reinsurance to reduce volatility and protect their capital and earnings. Our partnerships are evolving to meet the challenges around the increasing frequency and severity of property and casualty events.

We have worked with many of our clients to maintain an alignment of interests and a forward-looking solutions approach to achieve more solid, durable and stable partnerships. We want to grow with such partners, and we hope to continue those discussions at Baden-Baden.

How do you see AI impacting your interaction with clients?

We talk a lot about AI and data today, but the reality is our industry has lagged behind. That is a massive opportunity for us to enhance how we work and how we obtain better, more accurate and up-to-date information. Data quality is a differentiator. Some clients understand this well, and know it is in their interest to share transparent data with reinsurers. However, data quality remains a concern for too many accounts.

How is TransRe approaching this year’s renewals?

With confidence, enthusiasm and discipline. We have clear plans and strategies in place, and we are focused on execution as we look forward to further expanding and diversifying our EMEA portfolio with our client and broker partners.

Reinsurance is about resilience, and I think TransRe offers the financial strength to deliver resilience to our clients. Our expertise and financial security lend themselves to long-tail business and we have strong growth ambitions in some long-tail classes, in particular regional general liability business on a proportional basis. We are investing in select additional underwriting resources to realise and unlock our growth potential in EMEA.