In this video interview with The Insurer TV, Ed Hochberg, Guy Carpenter’s Head of Global Risk Solutions, discusses how upward movement in attachment points is driving greater demand for capital solutions, as cedents look to contend with rising levels of volatility.
“Between inflation, social inflation, political uncertainty and all of the risks that are out there, ceding companies still need to manage this volatility, despite the fact that the traditional (reinsurance) market is not so willing to expose itself down in the more attritional layers,” Ed explained. “But (cedents) still have to manage that volatility, and stakeholders still expect companies to manage that volatility and deliver a predictable result.”
Ed goes on to describe how cedents are looking at prospective and retrospective options.
“We've been involved in placing a lot of net quota shares, where carriers need to manage their capital positions and the amount of leverage they're taking on. And we've been able to construct sensible transactions for both parties,” he said. “We're really looking now at more aggregate solutions, and how companies can work with reinsurers to find a place where the point of economic risk transfer will make sense, and yet help companies manage the volatility that they're experiencing.”
Click image below to view the video
