The risks presented by the current hard market, cyber risks, and potential opportunities for innovation were discussed at Guernsey Finance’s Reinsurance masterclass, titled Opportunities for capital in a disrupted reinsurance market.
Stagflation and increasing rates in recent years have forced the insurance industry to find new and innovative ways to increase capital.
Victoria Carter, Chairman of International Global Capital Solutions at Guy Carpenter and Deputy Chair of Lloyd’s, said this is ‘the most exciting’ market she has seen.
In the first of two panel discussions, Unpacking Cyber Risk, Ryan Dodd CEO and Founder at Intangic, Robert Dorey, Group Chief Executive Officer at Astaara, Brian Kirwan, Global Head of Non-Life at Vesttoo, and Ian Newman, Global Head of Cyber at Gallagher Re, explored cyber as a space for innovation.
Ian said: “Cyber has the potential to outperform other insurance classes over the longer term.
“Cyber itself is the opportunity.”
He added that supply and demand in the cyber space varies but added that he believes additional capital will enter the market and cause ‘massive growth.’
Robert described the ways in which Guernsey assists in finding cyber risk solutions, saying Guernsey’s thriving captive market, supported by a quick and thorough set-up process with the Guernsey Financial Services Commission, were all key factors.
So, what’s next for cyber? Well, according to Ian, there are many opportunities in cyber, but the big challenge is how to attract capital. Once more capital is allocated to the market, opportunities in cyber will grow, he said.
The second panel of the day, titled Opportunities for capital in a disrupted reinsurance market, featured panellists Victoria Carter, Cate Kenworthy, Kate McInerney, Eric Paire, and Mat Thackery.
Opportunities have been created by the hard market, said Cate, who is Head of Investor Relations and Business Development in the UK and Europe at Securis Investment Partners. She said the last five years have shown that investors are looking for solid risk management.
Adding to the discussion, Eric Paire, Head of Capital Advisory at Aon Benfield, said those investors are more likely to back established reinsurers due to being more skeptical of new entrants in the midst of the current macroeconomic environment.
“I think it’s a much better position in the current market to back someone with an existing proposition and an existing track record,” he said.
It was noted at the conference that Guernsey, home to a specialist insurance sector with close links to London, provides a tried and tested environment for reinsurers.
Eric added that Guernsey offers investors a secure and stable regulatory regime and a well-respected legal system.
“Guernsey is an easy box to tick and takes away the stress to focus on the deal,” said Eric.
He noted Guernsey and Lloyd’s work hand-in-hand rather than in direct competition, with Guernsey structures providing access to opportunities within Lloyd’s for those not wanting to be based in the UK.
Mat Thackery, Managing Director of Kinmont, added: “It’s all about specialism and more appropriate MGAs. A Guernsey structure allows people to invest and put capital to work.”
The event was sponsored by Robus and Ogier.
Check out the gallery from this year’s event here.
