XPRIMM's review on 2012 Rendez-Vous de Septembre

13 September 2012 —
The 2012 Rendez-Vous de Septembre athmosphere catched a rather tensioned vibe during this year's meetings between insurers, reinsurers and brokers in Monte Carlo. Thus, negotiations for the 2013 renewal season tightened given the strong impact major catastrophic events had on reinsurers 2011 financial results, while dealing also with the harsh macroeconomic environment and the capital markets' volatility.

Yet, for the time being, the reinsurance market has succeeded in managing the crisis without any need for recapitalization or State aid, thus maintaining a rather stable pattern, both in terms of prices and conditions, with excess capital and a slowly increasing trend in rates.

In stark contrast to the prior year, the relatively low level of insured catastrophe losses in the first half of 2012 allowed most companies to report good earnings, the industry reaching a record level of USD 480 billion, which will most definitely influence next year's rates.

However, financial earnings are affected by the drop in interest rates and the instability of the financial markets and are further threatened by possible negative trends such as the collapse or member states withdrawal of the eurozone, increased exchange rate volatility and reduced access to credit.

Moreover, even tough reinsurance stands as a viable solution for companies looking for additional capital in order to comply with the Solvency II requirements, this also opening new opportunities for brokers, this Directive is generally seen more as a trouble maker, as they invested a lot in preparations still nobody really knows when and how it will be implemented.

On the other hand, at the moment there is a capacity excess on the market, and the demand for reinsurance is decreasing, which means that only a natural catastrophe with great losses could significantly change the market. That is why reinsurance brokers tend to contradict the expectations of large reinsurance companies and estimate "soft" reinsurance rates or even decreasing ones in some regions for the 2013 renewal season, provided no major loss event will occur in the last quarter of 2012.

To better understand and follow the discussions and negotiation at this year's meetings in Monte Carlo, check the headlines below:

VILLNET: Reinsurers went through crisis without any need for recapitalization or State aid
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Europe needs to address the terrorism risk more carefully
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Worldwide Nat Cat caused losses USD 26 billion in 1H/2012
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THIERRY: Profitability in decline for reinsurers
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New historical record in cat bonds in 2012
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VIDEO: The global insurance market went up by 4.8% in 2011, to EUR 3,300 billion, while reinsurance business rose to EUR 160 billion
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Claude TENDIL takes over from Jean-Philippe THIERRY as Chairman of the Rendez-vous de Septembre Association
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SCOR takes measures to counteract threats in the macroeconomic environment
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HANNOVER Re: Low investment income pushed ahead technical pricing discipline
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LLOYD's: EUR 107 billion paid for insured claims in 2011 for nat cat and man-made disasters
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M&A activity at its lowest in the last three years
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Solvency II, a growth driver for life reinsurance business in Europe
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SWISS Re expects moderately increasing re/insurance prices
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PHOTO GALLERY: Monte Carlo 2012: Rating agencies still confident in reinsurers' stability
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MUNICH Re expects a stable renewal season in 2013
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Low level of insured cat losses in 2012, favorable impact on capital growth and earnings
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VIDEO: Reinsurance brokers estimate a "soft" season of renewals in 2013
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At the 2012 edition of the traditional meeting, Media XPRIMM was represented by a team consisting of Adriana PANCIU, CEO, Alexandru CIUNCAN, Managing Partner, Oleg DORONCEANU, International Markets Coordinator, and Dimitrios TSOULIAS, International Markets Counselor. Also, XPRIMM Publications covered the event's debates, along with well-known industry names such as Reaction, Business Insurance, Global Reinsurance, L'Argus de l'Assurances, Insurance Journal etc.

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