2023 set to be hardest property reinsurance market in history: Argo’s Snyder

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Jessica Snyder, President, US Insurance, Argo Group, suggests that there will be an unprecedented hardening of the reinsurance markets across property and casualty lines in 2023, with ceding commissions down 2-4 points and perhaps the “hardest property reinsurance market in history.”

Further, Snyder notes that the evolving risk landscape will persist as the industry navigates geopolitical risks, economic uncertainty, rising inflation, increasing interest rates, and prolonged supply chain disruptions.

She adds, “The insurance industry will overestimate changes in one year and underestimate changes over the next five years. While inflationary pressures may impact reserve positions for specific carriers, rising yields will increase investment income and expand returns on equity.

“Growing inflationary pressures will create additional challenges to the sector through an elevated focus on proper reserves to cover existing claims through accurate underwriting of asset value at the next renewal period.”

While Snyder anticipates that the property market will likely be the hardest ever, she also notes that this will create opportunistic growth prospects for those companies with dry powder and the discipline to manage volatility.

She states, “Argo is well-positioned to navigate this industry landscape. We have a strong and diversified portfolio of specialty niche businesses, including a meaningful presence in the E&S market that continues to experience major tailwinds.”

“Our size allows us to be nimble and opportunistic where our larger competitors can not.”

The nature of insurable assets has also made a dramatic shift from tangible to intangible, says Snyder, adding that solving for how to insure more complex and less quantifiable risks will be a major theme and one that will place even greater value on specialty and E&S companies.

According to Snyder, talent attraction, retention, and compensation is also set to remain a huge challenge in 2023, as the lack of in-office experiences will impact the level of emotional intelligence and the ability to have tough conversations. She explains that as insurance is a people and relationships business, this could negatively impact the industry.

On the topic of insurtech, Snyder states that in 2022, carriers realised that investing in technology is a business imperative and not a “nice-to-have” option.

She says, “Industry leaders are making investments ranging from customer portals and automation to AI and prescriptive analytics for underwriting brokers.

“That said, investment in people seems to be a better strategic return on capital for best-in-class underwriting companies.”

The post 2023 set to be hardest property reinsurance market in history: Argo’s Snyder appeared first on ReinsuranceNe.ws.

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