Ascot Group president Jonathan Zaffino has said that some parts of the (re)insurance market still have more rate hardening ahead, as underwriters push for rate adequacy.
During a fireside chat with Insurance Insider as part of its (Re)Connect virtual conference, Zaffino said: “In my personal opinion, I don't think the property market – in the US for instance – is near where it needs to be yet.”
He noted that there is still “plenty of need for rate” in property lines, both as a reflection of the natural catastrophe environment and as result of attritional losses.
“We're resetting the clearing price of risk and that has to happen,” Zaffino argued.
“It has to continue to happen to make sure that there are adequate returns in light of all the different dynamics impacting risk assumption organisations of any form, whether you're insurance, reinsurance or alternative capital.”
Zaffino arrived at Ascot in May in a new role that spans the Canadian pension fund-backed carrier’s Bermuda and onshore US operations.
He said he was “bullish” about the Bermuda marketplace’s prospects.
“One encouraging theme is the amount of reinsurance capital that has been raised since Covid, half that capital has landed in Bermuda.”
But he also noted that it is London that has been at the forefront of new industry initiatives and solutions, as Lloyd’s syndicates prepare business plans for 2021.
“I still think the ingenuity of London will continue to thrive and look to solve problems,” Zaffino added.
On the debate between premium growth versus underwriting discipline, the former Everest Insurance CEO said: “Scale for the sake of scale is not a good strategy.”
Premium growth that comes through properly executing an underwriting plan is a more effective approach, he explained.
“It all starts with those [underwriting] fundamentals and you can't ignore those in this market, that has to be very much front and centre,” Zaffino noted.
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