Dua Lipa's New Rules opens by chanting "1/1", before proposing a set of rules for exiting problematic long-term relationships. Let me know in the comments if you can think of a better song to sum up the January 2023 renewals!

“One, One…”

Never have reinsurance buyers faced a renewal season more challenging, unpredictable and perhaps, existential, than that closing on (or just after) 1st January 2023. 


Hurricane Ian was far from the whole story. 

Neither was it fully told by the largest war in Europe since WW2, the backlash of a pandemic that saw productivity fall and public debt soar, the much-belated acknowledgment of climate change’s impact on the cost of natural perils, nor – as central banks sought to outrun inflation on one hand and a global recession on the other – a fundamental shift in decades-unchanged monetary policy.

By contemporary comparison, the previous years looked rather rosy for reinsurance buyers the world around. 

Abundant capital clung on through a sustained soft market cycle that rarely saw prices rise, even in a sustained period of record average catastrophe years. 

Loss-hit accounts renewed flat for fear of losing hard-won positions on panels, whilst the superior bargaining power of cedents saw ceding commissions reach stratospheres hitherto unseen.

“Talking in My Sleep at Night, Making Myself Crazy…”

This year, the market was up late with the opposite problem, as panels emptied and invitations to quote went unheeded. 

Like Christmas party hosts with an abundance of costly food and drink – but no guests RSVPing – many cedents and their brokers were rightly a little panicked.

So much for the holiday season.

But what could explain such a sudden cold snap?

Weren’t reinsurers supposed to have modelled a price that cedents could consistently budget for, a cost they could expect to hedge, in lieu of uncapped volatility?

Reinsurers, collectively, have certainly failed in this regard: but can we really put the blame on the folks who’ve spent the last twenty years having their terms beaten down with the bludgeon of information asymmetry?

“Wrote It Down and Read It Out, Hoping It Would Save Me…”

Perhaps over-encouraged by the short-term benefits of opacity, many submission packs had failed so abysmally to convince reinsurance partners of their accuracy, year-on-year, that they had come to be regarded with contempt – and their pricing sheets, accordingly, loaded heavily for uncertainty.

A hastily-bundled together submission, paired with a broker waxing lyrical about what a fine character the cedent is, was once enough to get a line down.

Not in 2023.

With questions flying in left, right and centre, cedents and brokers were forced back to the drawing board at the eleventh hour.

Evidently, reinsurers had established a set of new rules for engaging their partners, too.

“1. Don’t Pick up the Phone…”

Failing to provide a data-driven justification, it seems, came with a price – or perhaps more accurately, without one – as reinsurers stopped quoting altogether.

In a call for more sustainable rates, unseasonable price hikes followed an industry-wide call-to-arms from Swiss Re Reinsurance CEO, Moses Ojeisekhoba:

There’s now near-universal recognition that the program structures that reinsurers have offered in recent years when market conditions were softer have not been consistent with the losses that were ultimately borne. This realisation began to set in some time ago, but it’s resonating ever more strongly in this latest round of renewals as focus is placed on achieving appropriate terms and conditions and sustainable risk pricing levels that adequately reflect the present volatility.”

So strong were reinsurer convictions that even ‘blue-chip’ cedents like AXA XL and Liberty were forced to drop the first layers of their North America cat programmes. 

After hiding behind paper-thin exhibits for decades, many other cedents faced a scramble to disprove the market’s conclusion that, if the world was inherently riskier, then so were their portfolios.

For reinsurers, the lack of good data at the 2023 1/1 renewals – through which pricing conclusions could have been evidenced – put strain on important relationships.

For buyers, that same lack of good data served to challenge their entire purchase.

“2. Don’t Let Him In…”

While on one hand, it seemed reinsurers could point in any direction to show the need for a rate increase; on the other, it was notable how infrequently they could point in any particular direction.

Andy Marcell’s interview in the run up to 1:1 highlighted the frustration caused and potential harm done to client relationships by “late quoting, mixed messaging and inconsistent changes to coverage terms”, but also the lack of specificity in reasons for rate rises:

“[Clients are] willing to pay more rate, but the justification for some of those rates seems all over the map and there's very little in the way of technical backup to support those rates, in terms of what is adequate, and what is opportunistic.

In what is arguably a turning point for the reinsurance industry – and perhaps, a terminal break in etiquette – market participants on all sides have started to request data-driven explanations for the prices sought.

The temerity.

But perhaps our industry really is ready to start playing with Promethean fire, as a path towards more accurate and reliable data emerges.

“3. Don’t Be a Friend…”

In this context of both souring relationships – and a reinsurance talent pool built increasingly on a test of technical potential rather than paternity – more robust foundations for underwriting seem especially relevant.

Gone are the days where reinsurers got their capital on the cheap; gone too is the tourist capital splurged on submissions disregarded at the recommendation of a friendly neighbourhood reinsurance broker.

Amidst the surge in competition for capacity, data quality is everything. 

And yes, of course, this author is a little biased in this conclusion.

But to quote a recent The Reinsurance Podcast episode with the Allianz Re leadership, a class of ‘22 has yet to emerge, as markets the world around take a sterner look at the expected performance of their investment classes.

Any and all capital retained by the reinsurance industry will be subject to closer scrutiny from investors who might get a better return, for less risk, elsewhere. 

That means cedents must demonstrate credibility in spades: to even get a look-in, they can’t afford any data Truss-ups.

“Practice Makes Perfect…”

This past renewal season was impossible to budget for, not only because of the shifting external landscape, but also because of the reinsurance industry’s lack of investment in quality submission data.

As we discussed in a recent podcast, cedents had just as hard a job as their brokers and underwriters in trying to figure out how much their reinsurance should cost, when up until the late stages of the renewals process, they were still figuring out what their own books looked like.

It’s taken a market shock to put data back under the microscope, but in our minds, that’s a good thing for an industry that likes to take a long-term view on partnerships and yet for a long time, has had that view obscured.

This year was the warning, the practice year: it’s time to get ready for a sea-change in data quality come 1/1/2024. 

“Nowhere to Turn…”

And if that sounds tough, don’t throw in the towel just yet.

Data credibility can be obtained much more easily than you might think.

For buyers and brokers facing off against the investigative eyes of their reinsurance partners, the measure of credibility is straightforward.

To what extent do you accurately say what you do, and year after year, reliably do what you say?

Yes, it’s something which has challenged cedents for decades: but that’s because they’ve never had the right tools for the job.

Until now.

Fortunately, a band of reinsurance professionals and software engineers got together a few years ago to create a suite of tools specifically designed to make reinsurance easier: including checking the consistency and reliability of outwards submission packs, before they go out to market.

“Now I’m Standin’ Back From It, I Finally See the Pattern…”

If you doubt that the problem can be solved, or you think your data is any more complicated than that of the many international specialty insurers who spent this renewals season chilling thanks to Supercede, check out this recent quote from a happy customer:

Supercede was very good at organising and managing our submission data. Having one workspace for our packs, which we can handily share with our brokers, makes it very easy to get everything sent off in time. Furthermore, we can now log all submission data, giving management a valuable year-on-year overview.”

Get in touch if you need to see it to believe it. 

This tech is new, and it rules.


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Jerad Leigh
Ben Rose
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Tom Spier
Livvie Sandells