The Insurer TV: Aspen targets growth of real estate cats in ‘lack of capacity’ | New

During the last episode of Near neighborhoodRippert outlined his plans for the reinsurance unit after a period of “significant remediation”, which saw the carrier reduce its California wildfire exposure and exit the credit and surety business lines.

Talk to The insurer TV About his expectations for the Jan. 1 renewals, Rippert said Aspen will strengthen its position by capitalizing on the “best opportunities.”

“Probably the best opportunity there from our market perspective is with some of the property lines,” Rippert said.

“So the real estate disaster in particular… there’s a shortage of capacity in the market, prices have firmed up.”

Aspen’s strategy contrasts with a broader industry trend that has seen some carriers reduce their appetite for real estate cat business, prompting some commentators to warn of a capacity shortage.

A recent report by AM Best indicates that reinsurers have shifted their exposures to excess and surplus lines, casualty lines or primary specialty businesses.

Global reinsurance – estimated total dedicated reinsurance capital

But despite a reduced appetite, Aspen will continue to focus on growth through its portfolio of properties and real estate disasters because it sees “big price opportunity” in that part of the business, Rippert said.

He added: “We are thinking about our strategy while managing our peak exposures and our PMLs. [probable maximum losses]but also thinking about tier two and tier three exposures, how they are valued and how they are placed in the market.

Rippert said this strategy was a focus for Aspen ahead of the Jan. 1 renewals, alongside resizing the reinsurance portfolio.

But the Aspen Re CUO is also cautious as it considers renewal. Speaking about the main talking points at this year’s September Rendez-Vous, Rippert said: “It will be interesting in Monte Carlo to hear and work as we move into renewals. 1.1, what is the impact of inflation and inflation market trends [and] how does this affect losses and prices? »

Geopolitical tensions are also at the heart of Rippert’s concerns.

“We are all well aware of the conflict between Russia and Ukraine and what this has meant for losses or potential losses in the reinsurance market. And now we are seeing geopolitical tensions with the People’s Republic of China, versus Taiwan. So we think about what that means and think about the terms and conditions, the wording of the contract and the opportunities.

Unbundling exposures to open up pricing power opportunities

Discussing opportunities in the market this year, Rippert pointed to significant changes in the aviation segment following Russia’s invasion of Ukraine.

“If you take a look at the aviation market, you have to look across the major airlines, the more general airlines, more exposure…and it will be interesting to see how those segments of the market perform. “, Rippert said.

He added that these opportunities also apply to other parts of the market, such as retro and composite lines more generally.

“There are going to be a number of changes in these markets: the unbundling of exposures, greater transparency in what is being taken and better disclosure will improve how we manage the potential for conflict,” he said. .

“Our view is that there is an opportunity here. Where there is more transparency and a better understanding of managing the potential for conflict. There is definitely pricing power,” Rippert added.

Watch the 14-minute interview where Rippert discusses the following in more detail:

  • Aspen’s appetite for reinsurance and where the growth opportunities and challenges lie
  • The Impact of Aspen’s $3.57 Billion Loss Portfolio Transfer Agreement with Enstar
  • The outlook for the P&C and specialty markets before discussions on the renewal of the 1.1
  • Opportunities in the mortgage unit amid rising interest rates