“There could be a liability crisis in reinsurance in a couple of years,” a reinsurance executive predicted this week.
Ken Brandt, chair, president and chief executive officer of TransRe, offered the assessment during a 30-minute chat with S&P Global Ratings Director Taoufik Gharib at the 40th Annual Insurance Conference. Brandt, who had more positive observations about the property reinsurance market, said liability losses emerging from past accident years, and already starting to show up for more recent years, could spell trouble.
“The U.S. casualty market is driving most of the conversations in the industry right now, without a doubt,” Brandt said, responding to an initial question about overall reinsurance market dynamics. “When I travel around the globe and talk to some of my counterparts of our European customers, [this] is the No. 1 issue that people talk to me about: It’s U.S. casualty—their exposure to the U.S.,” he said.
Is that market going to turn around at some point?
“I don’t know,” Brandt said. “I think that we have a serious issue…..The ’14 through ’19 accident years, or ’15 through ’18—wherever you want to characterize the last soft market for U.S. casualty—are horrendous.”
As a result, “the renew