Re/insurers to see pricing momentum within casualty lines in 2024: W. R. Berkley CEO
The re/insurance industry is to see broad-based pricing momentum within casualty lines in 2024, mainly driven by social inflation, according to Robert Berkley, Jr., President and CEO of W. R. Berkley Corporation.
In addition to social inflation, the reinsurance marketplace, across the board and particularly on the treaty side, is starting to wake up and recognize some of the challenges that the liability market faces, Berkley explained.
The property line, while it may not be to the same extent, is going to start to focus on some of the liability lines, something that Berkley expects will introduce further discipline into the casualty market.
The CEO stated: “Quite frankly, if you go back in time, we’ve sort of been standing on our head and jumping up and down, talking about social inflation for many years. And we started pushing on the rate pretty early.
“It’s been good to see more recently people showing up to the party and recognizing what that loss trend is, recognizing what that means for this loss cost and taking action.”
He added: “Do I think it’s possible that you’re going to see some of the reinsurance marketplace trying to take action, for example, on ceding commissions? Yes, I do.
“The good news for our organisation, as we’ve discussed, our limits profile and how the business is operated with approximately 90% of our policies legally allowed to have a limit of $2 million or less, that makes us less reinsurance dependent.
“So, consequently, we have the ability to pivot and think about what we buy perhaps differently than some of our peers, and we also can shift structurally.”
Berkley highlighted that a hardening reinsurance market when it comes to the casualty lines, net-net will be very good for the firm. This is mainly because it will force further discipline and consequently pricing power for the primary market.
“And in addition to that, my colleagues on the reinsurance side, I’m sure will be right in there, seizing the opportunity,” he concluded.
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