NARRATOR: Welcome to Global Marketplace Insights by Willis, a WTW business. A podcast series showing the latest trends from the specialty and regional insurance markets.
SIMON DELCHAR: Hello and welcome back to the Marketplace Insights podcast series. I'm Simon Delchar, global head of placement for Willis, and I'm delighted to be joined today by Swifty, Alastair Swift, CEO of Willis UK and the global specialties
Swifty, last time we spoke, we spoke about the market conditions at the time, which were generally soft, and that seems to be continuing. Market is still pursuing growth. The loss ratios that we're seeing being published now are still very healthy in the '90s. So it's still a good time to be a buyer. You recently attended the rendezvous at Monte Carlo. Did you hear anything different or anything more interesting there?
ALASTAIR SWIFT: Simon, thank you and great to be with you all again. I think the biggest takeaway I had from the rendezvous was the deafening silence from everybody about where the market was and where the market was going. But underneath it all, there was definitely a view and a vibe that there was going to be an abundance of reinsurance capacity available at the end of the year looking to deploy.
That was going to put some pressure on reinsurance pricing, which should filter down into to the pricing that we see for insureds on the upfront placements into 2026, that potential markets would look to deploy slightly lower down than they had do on insurers reinsurance programs.
So potentially, net retentions from insurers could go down benefit to the direct clients. And also that there will be limits there available to people from a capacity perspective. So I think in general, the outtake was for this stage in the year, and it's obviously very early, but I'm going to say a very positive mood if you were sitting on the front end of this from a client's perspective, in that reinsurance pricing should moderate slightly.
Because the results we've seen from the insurers have been echoed by the results of the reinsurers this time around, and there's something for them to give back. So I think, yeah, the upshot of it was positive if you were buying insurance at the moment.
SIMON DELCHAR: Good. I think we're starting to see rather than just price, we're starting to see some pressure on deductibles or some movement on deductibles by markets. I think we'll start to see some movement in coverage, maybe not as wide as we and our clients used to enjoy before the last hard market. But I don't think it's just the price market anymore.
I think it's gone a bit beyond that. You talk about cat losses, for the last five or six years, $100 billion has become the norm annually. There's no great hurricane activity in the Atlantic at the moment, and we're kind of right in the peak of it at the moment. So I guess it looks like, absent a severe storm, it's going to be more of the same rolling into 2026?
ALASTAIR SWIFT: I think so. I mean, to your point, I think the coverage is inevitably going to be something that everybody looks at now. Certainly, in my career, and I'm sure in yours, the first thing you see that starts benefiting a client is a reduction in pricing.
The next thing tends to be around deductibles and excess points. And the last thing that starts to give is coverage and a closing of that insurance gap that gets created to a greater degree in a hard market. So, I think we're definitely at that point in the cycle, where all three of those as we go into 2026, if it continues like this.
In some lines of business, we'll continue to, I'm going to say, improve from a client perspective. There are exceptions to it, though. And we need to be careful that not to set everybody's expectations running across every line of business. Because US casualty, auto, aviation, still areas of the business that, to some degree, are under pressure from a pricing perspective, just because of the historic loss ratios that are transpiring in those particular lines. But in general, I think an improvement in terms and conditions, deductibles, and pricing will be on the horizon for 2026 across quite a few lines of product lines that clients will look at.
SIMON DELCHAR: So all in all, a better time to be a buyer.
ALASTAIR SWIFT: Better time to be a buyer.
SIMON DELCHAR: About time, really. So we launched Gemini in Q3, and there's now a plethora of these portfolio arrangements in the market. Do you see them as a symptom of the market climate, or do you think they're here to stay?
ALASTAIR SWIFT: I don't see them as a symptom of the market climate. I see them as a symptom of what has been inherently an inefficient market over the years. And actually, I do see them as being here to stay. At the end of the day, the market has to try and find more efficient ways to deliver capacity to our client base.
And Gemini and others are excellent ways of doing this, actually at competitive terms for our clients and with a streamline of efficiency. So, no, I think that there are a reflection of years of inefficiency in the market, and people finally getting to the point of addressing this, and finding ways of deploying capital more effectively and more efficiently on behalf of our clients. And I see them actually operating through all different cycles of the market.
SIMON DELCHAR: I think it's an interesting debate that we've been having recently in terms of how far do these go in terms of market penetration. My view, is that the lead broking, the lead underwriting still remains vitally important, and we can never understate the significance of that.
Because at the end of the day, these facilities need something to follow. I do think lead markets remain well placed as long as they've got something to offer other than just capacity. Do you agree?
ALASTAIR SWIFT: I do totally. And it's the depth and breadth of service offering that they've got as well. So, how are they from a claims performance perspective? How are they from the point of view of agreement of wordings? How are they with regard to policy issuance?
How engaged can they be in the conversation with a client around trying to address the client's needs, not just in one product line, but across multiple product lines? All things that lead markets should be focusing on. And I think if they bring those types of skills and that expertise to the equation with a client, they'll absolutely have a place.
The area of the market, though, that is going to be consolidated is where people don't have a differentiated offering. And frankly, that is the area that should be potentially facilitated in some fashion. So it's actually easier to get to because it's about efficient deployment of capital versus underwriting skills and breadth of expertise and offering that you'll get from a lead market.
And certainly is, as you said, as we've been in discussions, it's not just a market that can lead everything. We need a strong and competitive lead marketplace. And I think that, to me, will be the limiting factor potentially for some of these facilities.
Because you need to have enough open market business, where these lead markets can compete against each other in a successful fashion. And if we have that, we'll continue to have a very competitive marketplace that is supported by efficient placement solutions.
SIMON DELCHAR: Yeah, yeah. As you say, I think it's about efficiency and ultimately getting things right first time so that the clients benefit from that. I do fear for those markets, who just provide capacity and where they will be.
I mean, if you're the capital provider, then you can just change the way that you provide that capacity. But if you're actually employed in that area in that team, then it's obviously something to be very aware of.
ALASTAIR SWIFT: Yes. And I think, it's very rare that you see one market that can lead in every area of their business. And so what this will do is for those areas where you can't necessarily build that lead capability potentially, then you can be more efficient with how you deploy capital, which allows you to be more capital efficient as an insurer overall and deliver something that is going to be better to clients.
So I think it's, I mean, I can count them on one hand, I think markets where we could say they could lead potentially in every class of business that we do, yet every market we do business with wants to have a breadth of lines of business that they underwrite because it creates capital efficiency for them.
SIMON DELCHAR: Yeah. And I guess we can't really finish without at least a comment on the continued upsurge, really uptick in MGAs. There is a very congested marketplace now, the MGA area. And it doesn't seem to be slowing down at all.
ALASTAIR SWIFT: No, and I think that it is a route for underwriting talent, potentially to deploy outside of some of the major insurers, and potentially look, it could create insurance companies of the future. They have to start somewhere.
And actually, some of these MGAs potentially could blossom into those types of ventures. And again, do I see them here to stay? I do, in some shape or form through the cycle. However, I do think that we need to look very, very carefully at which ones we're using on behalf of our clients.
Because it's not just about where they are from a pricing perspective today, it's about are they going to be there and in control of the claims paying in the future? And it's no good just getting a cheap price from somebody today, and then not getting a claim paid in three years time.
What we need to do is we need to be really analyzing as we're talking to clients, and we're deploying MGAs on their behalf is, OK, where are they on that competitive landscape perspective? But also, do they have that claims paying ability because that's where the proof's going to be.
SIMON DELCHAR: What's they're offering, is it just capacity? And do they have a niche? Do they have tech that others don't have? And as you say, on average MGAs, take typically twice as long as other underwriting partners to pay claims. And that's a challenge. Swifty, thank you for your contribution on this episode of The Marketplace Insights podcast, and I'll see you next time.
ALASTAIR SWIFT: Can't wait, Simon. Thank you.
NARRATOR: Thank you for joining this WTW podcast featuring our latest global market commentary. WTW offers insurance-related services through its appropriately licensed and authorized companies in each country in which WTW operates. For further authorization and regulatory details about our WTW legal entities operating in your country, please refer to our WTW website. It is a regulatory requirement for us to consider our local licensing requirements.
The information given in this podcast is believed to be accurate at the time of publication. This information may have subsequently changed or have been superseded and should not be relied upon to be accurate or suitable after this date. This podcast offers a general overview of its subject matter.
It does not necessarily address every aspect of its subject or every product available in the market, and we disclaimer all liability to the fullest extent permitted by law. It is not intended to be, and should not be used to replace specific advice relating to individual situations, and we do not offer and this should not be seen as legal, accounting, or tax advice. If you do intend to take any action or make any decision on the basis of the content of this podcast, you should first seek specific advice from an appropriate professional.
Some of the information in this podcast may be compiled from third-party sources we consider to be reliable. However, we do not guarantee and are not responsible for the accuracy of such. The views expressed are not necessarily those of WTW. Copyright, WTW 2025. All rights reserved.
