At S&P Global Ratings’ 41st Annual North American Insurance Conference, the key topic of conversation was uncertainty, yet S&P believes the industry is well-positioned to withstand it, viewing global reinsurance and North American life and property/casualty (P/C) insurance as stable.
The main areas of uncertainty—and volatility—on the minds of S&P’s external panelists were economics and geopolitics, technology and AI, private credit, extreme weather, and regulation.
S&P’s first external speaker, Alan Schnitzer, chairman and CEO of The Travelers Cos. Inc., said, “There’s certainly a lot of uncertainty.” He added that uncertainty is “just a way of life” for insurers—a sentiment echoed by CEOs from life, P/C, brokers, and reinsurance throughout the conference.
Arthur J. Gallagher & Co. Chairman and CEO J. Patrick Gallagher, Jr. noted that insurance remains “an incredibly important focus of the leadership teams of most of our clients.” He emphasised that a broker’s advisory role becomes even more critical during periods of uncertainty, helping clients navigate insurance-related decisions in an evolving landscape.
Carl Lindner III, Co-CEO of American Financial Group Inc., added, “Day to day, we’re pretty much in the business of managing risk and uncertainty.”
Tony Cheng, president and CEO of Reinsurance Group of America Inc. (RGA), said, “We actually like complex environments,” as the uncertainty spurs demand for the long-term benefits that life insurers provide, and thereby life insurers’ demand for reinsurance.
Despite this optimism, Carmi Margalit, Managing Director and life insurance sector lead at S&P Global Ratings, said uncertainty is the main reason S&P’s sector view for life insurance is stable, not positive. A possible recession or economic slowdown could put insurers’ investment portfolios at risk.
Paul Gruenwald, Global Chief Economist at S&P Global Ratings, noted that S&P does not include a recession in its baseline view. However, he stressed that it is the uncertainty—and associated volatility—that is driving forecast changes, not any specific policy.
Additionally, panelists expressed growing interest on the life side in offshore reinsurance vehicles—especially in Bermuda.
Jeff Burt, Co-CEO of Aquarian Insurance Holdings LLC, said, “The biggest benefit that Bermuda has over all the other offshore jurisdictions is the track record and the experience.”
Imran Siddiqui, CEO of Talcott Financial Group, commented, “The decision on where to reinsure is mainly driven by clients’ preference in jurisdiction and what ultimately serves the policyholders best.”
While mutual company CEOs O’Malley and Hilger said they are not opposed to offshore reinsurance, they have yet to use it. O’Malley said his jurisdiction of choice is America. Meanwhile, RGA maintains its own offshore reinsurance. Cheng emphasised the need for well-regulated offshore jurisdictions to ensure a relatively level playing field.
Amid all this uncertainty, S&P believes the industry is well-positioned to withstand it. Reflecting S&P’s stable sector views on North American life and P/C insurance and global reinsurance, panelists also emphasised the stability the insurance sector provides in times of uncertainty.
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