IQUW’s Lamer: “Latent demand” will lead to growth opportunities in property for some time
Latent demand for property coverage will ensure a continuation of rate and provide the best opportunities for growth, IQUW’s head of reinsurance in Bermuda Rene Lamer has said.
Speaking to The Insurer TV this week at the Bermuda Risk Summit, Lamer explained that property was in the best place to offer growth due to “pressure from investors, a lack of capacity and increasing demand”.
Lamer continued: “I think there's a lot of latent demand that has still yet to come to market and so I think property is probably the area that will see the most rate and the most ability for companies to grow.”
IQUW’s reinsurance portfolio consists of two property treaty books – international and US – and a specialty book.
Turning to other lines of business that Lamer is looking to grow IQUW’s presence in, he pointed to the dislocation in the aviation and the energy sectors and cyber as areas of interest.
Focusing on the impact of Lloyd’s clampdown on cyber risks, Lamer said he expects this to offer “good opportunities” for Bermuda and other non-Lloyd’s markets “to take advantage”.
However, Lamer said he understood Lloyd’s decision, adding: “Lloyd's has to do what it deems necessary to protect its own capital base and its own standing.
“Cyber is a relatively young line of business and delineating or separating coverage, and pricing for each of those coverages appropriately, is what needs to happen over time. I think we are just in the process of seeing that evolve.”
Uniquely hard market to remain at 1.4 and 1.7
Speaking more generally on current market conditions, Lamer views the current hard market as “slightly different” from those in 2001 and 2005.
Unlike previous hard markets, the one the industry is currently experiencing has been driven by “a series of events over time” with investor mistrust, issues around pricing and inflation combining to create “a lot of hostility”.
“There's a lot of dislocation in the market from a supply and demand imbalance. There's also a lot of pressure from the investor side due to investors’ lack of confidence in the market's ability to price extreme volatile risk,” Lamer said.
As a result, he expects “the forces at play” during 1.1 to remain for the renewals at 1.4 and 1.7.
Lamer suggested that “rate helps” in regaining investor confidence, but there was a lot more work needed by the industry to “earn it back” and get funds flowing into the market.
The Insurer TV talks to IQUW’s head of reinsurance, Bermuda, Rene Lamer
Watch the 7-minute interview for Rene’s thoughts on:
- How this hard market compares to others
- Latent demand in property reinsurance purchasing
- Other areas of market dislocation which could be advantageous
- Outlook for 1.6 and 1.7 renewal dynamics