RenRe’s Walden: Casualty in an “interesting place” as uncertainty drives market reaction

The casualty market is at an intriguing juncture, according to Fiona Walden, chief underwriting officer for casualty and specialty at RenaissanceRe, with various underlying classes exhibiting distinct dynamics and placing the focus on client differentiation.

Speaking to The Insurer TV, Walden broke down some of these dynamics starting with general liability, a market which faces “considerable uncertainty”, mirrored by recent price increases.

However, there's ongoing debate about whether these increases sufficiently counterbalance the uncertainty.

“I think what we're all asking ourselves at the moment is if those price increases are sufficient to compensate for that uncertainty that we're seeing,” she said.

“At the moment, we're seeing that rate is keeping up with trend within general liability, but it's definitely in focus.”

In contrast, D&O, specifically public D&O and excess public D&O, presents a different scenario. Despite facing similar inflationary pressures and adverse development from past years, discipline in rate adjustments has lagged, influencing reinsurance pricing and underscoring concerns in underlying rate trends.

“We haven't necessarily seen the same discipline when it comes to rate,” she said. “We haven't seen the rate keeping up with the trend. So, that has had an impact on reinsurance pricing. So, we are seeing that adjust, but we're still seeing cause for concern in terms of underlying rate as we look at it versus trend,” Walden explained.

Given the “broad dynamic” within casualty, differentiation is crucial to RenRe’s client strategy.

“What's key from our point of view is differentiating within casualty – so, portfolios, clients, and what data and insights we can get, and that we can provide to our clients as we navigate that slightly more uncertain landscape,” she said.

Until relatively recently, RenRe was a smaller player with casualty, with Walden describing the group’s approach and expansion into the casualty market as “intentional and selective”.

“Prior to 2020, we definitely had a smaller casualty portfolio and we were quite intentional in our growth with certain key clients and the best clients that we could see there which naturally meant that we didn’t have the same scale of exposure from those prior years which we’re currently seeing develop,” she said.

“But we’ve had more inorganic growth, actually through acquisition in more recent years. And there we've benefited from some protection through adverse development covers. But I would say that the way we've tried to look to construct the portfolio, both for those older years and more recently, is to try as much as possible to insulate ourselves from pockets of risk that are more exposed to whether it's economic inflation, or social inflation pressures,” she added.

Moving away from casualty, the conversation shifted to the specialty market, where Walden described varied dynamics.

Cyber insurance, in particular, has seen significant changes, with pronounced growth and a recent shift towards more robust underwriting standards. Despite a softening market, Walden observed continued discipline in underwriting standards and a focus on managing aggregation risks.

Regarding other specialty classes, Walden noted favourable conditions across most lines, with particular attention to those exposed to geopolitical risks like marine and aviation. Amidst increasing political unrest and election year uncertainties, Walden explained that RenRe maintains a focus on pricing, retention, and wordings to support their clients.

Life after Validus deal

On the subject of RenRe’s $3.3bn acquisition of Validus Re from AIG, which completed in November 2023, Walden said the integration had gone “extremely well”.

“This was demonstrated by the successful renewal at 1.1 as well,” she said. “The timing was fortuitous in a way, to have people, the team coming on board and the book coming aboard so close to renewal. That was a real positive in the end, as it brought the team together.”

For Walden, the union brought together analytical expertise and talent, strengthening RenRe's position in the market.

“The Validus book actually was very similar in many ways to the historic RenRe book, which again, was beneficial for us as we look to grow into attractive market conditions. There were some pockets actually where we were able to build on lines of business and build diversification and specialty would probably be a good example of that,” she added.

Finally, reflecting on her journey Walden shared her career highlights and the importance of being genuine, embracing diversity, and encouraging others to do the same. She emphasised the responsibility and pride in being a trailblazer for women in the industry, while bestowing some good advice for those coming up in the industry.

“Be yourself. It's extremely tiring if you're not yourself. And so my advice would be to be yourself, and to recognize what comes along with that is being sometimes fearless, but sometimes being quite vulnerable, and that's okay,” she said.

“There will be times of frustration, there will be times that you feel it's unfair. But take those cuts and kind of make them wisdom and use them to help others to kind of grow alongside you. Because if you can be yourself and show up as yourself, then the people end up being a mirror of you,” Walden concluded.

Watch the 14-minute interview with RenRe’s Fiona Walden to hear more about:

  • Her views on the casualty market and the opportunities RenRe feels comfortable with
  • Cyber risk and RenRe’s growing appetite
  • What’s driving dynamics in the specialty market
  • Validus Re acquisition
  • Her advice to her younger self