Navigating market volatility and complexity
In an age of uncertainty, with intensifying climate change,technological transformation and volatile geopolitics, it’s harder for insurers to be certain of the scale of risks and potential losses on their books.
While changing risks can bring opportunity, they also add to volatility in the insurance market,with far reaching impacts on everything from appetites and retention rates to capital management and growth plans.
About the survey
Our survey was carried out by our partner Coleman Parkes Research in July-August 2024, using a mixture of phone interviews and web-based survey forms.
We received 300 responses from senior decision makers within leading P&C insurance companies based in Europe, the U.S., Asia-Pacific and Latin America.
When: July-August 2024
Who: 300 senior decision makers in leading insurance companies, including C-suite executives, vice presidents and heads of property and casualty.
Where: EMEA: Germany, Italy, France, Spain,Switzerland, Ireland, UAE, Netherlands;North America: USA, Canada; APAC: China, Taiwan, South Korea, Japan;LATAM: Brazil, Argentina, Mexico.
Size: P&C insurance companies buying reinsurance for gross written premium (GWP) in excess of USD$1 billion: 43% USD$1 billion-USD $5 billion, 34% USD$1 billion-USD$10 billion, 23% USD$10 billion or more.
Key findings
Demand for facultative is growing
68% of respondents said they intended to buy more facultative over the next two years,reflecting a need to manage volatility in an increasingly complex and changeable insurance market.
High-value risks are the top reason to buy
58% ranked managing high value and specialty risks among their top reasons for buying facultative reinsurance as they seek a buffer to help them participate in large placements.
Facultative is seen as a key strategic tool
86% of agreed or strongly agreed that facultative is a key part of their strategy for managing risk,capacity, capital and appetite, suggesting cedents view it as an important tool to achieve business objectives.
Financial ratings are a strong driver
55% said improving their financial rating was top reason to buy facultative, a response to increased regulation and scrutiny of the industry and financial market requirements.
Cyber is a top opportunity — and concern
58% named cyber insurance both as a top business opportunity and as a risk causing them the greatest concern. Both of these conflicting drivers may increase demand for facultative solutions.
Lack of capacity is a barrier to cover
56% cited limited capacity as a barrier to buying enough facultative reinsurance, indicating continuing questions over the ability and willingness of reinsurance markets to meet growing demand.
Download your report
To learn more, download your free survey report by completing the short form at the top of this page.
WTW’s Facultative and Structured Risk team can help cedents navigate this landscape and achieve their ambitions through excellent submissions and advocacy, access to global reinsurance markets, and a consultative approach to reinsurance, identifying the optimum balance of retention and risk transfer.
Contacts
Download the 2024 Facultative Reinsurance Report
Our Head of Fac, US Ivan Breen, and our Head of Fac, GB Tony Simm, speak with The Insurer TV to explore how the insurance industry is using facultative reinsurance to foster growth.
