Guy Carpenter, a reinsurance and risk advisory firm, reports in its Global Specialties Market Update on the current dynamics shaping the Credit, Bond & Political Risk (CBPR) market.
According to Guy Carpenter, the global insurance environment remains volatile, influenced by ongoing geopolitical tensions and economic uncertainty that have persisted over the past five to six years.
Despite these challenges, Guy Carpenter notes that insurers continue to demonstrate a strong commitment to CBPR lines, adapting strategies to evolving market demands and shifting risk profiles.
Carriers are increasingly prioritising careful risk selection and judicious deployment of capacity, reflecting heightened global risk awareness. Guy Carpenter highlights that a persistent gap between perceived risk and actual loss activity continues to provide underwriting opportunities.
Capital is returning to CBPR markets due to its strong profitability and low correlation with traditional catastrophe exposures, with Guy Carpenter reporting that performance across CBPR lines has exceeded expectations, further attracting reinsurer interest.
In today’s market, many cedants are focusing on managing reinsurance expenditures rather than expanding treaty coverage.
In response, Guy Carpenter is engaging clients earlier and more frequently in renewal planning, with strategy development for January 1 renewals already underway—featuring clear milestones, increased market engagement, and a strong focus on data-driven analytics.
“The CBPR market has historically demonstrated strong resilience through global shocks, such as COVID 19, the Global Financial Crisis and the Arab Spring. This track record has enhanced its appeal as a reliable, less correlated and less-cyclical line for reinsurers,” added Alistair McVeigh Managing Director of UK Credit, Bond & Political Risk, Guy Carpenter.
“New reinsurers entering the CBPR space are looking to adopt highly selective strategies, targeting blue-chip programs and avoiding high-volatility exposures,” said Stephen Balderston, Managing Director of UK Credit, Bond & Political Risk, Guy Carpenter.
“Many cedants in the current reinsurance market are focusing on managing reinsurance expenditure rather than expanding the scope or coverage of their treaties,” noted David Edwards, Head of UK Credit, Bond & Political Risk, Guy Carpenter.
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