Key Insights from the 2019 RIMS National Conference and Exhibition

2019RIMSinsight_blog

The 2019 RIMS Conference and Exhibition concluded last week with more than 10,000 attendees gathering in Boston to navigate the 400+ exhibitors and 300+ speakers.  As a proud sponsor of the event, Old Republic sent several representatives to participate in discussing emerging trends and innovative solutions, as well as build relationships through various networking opportunities. During the week, a number of themes emerged throughout these discussions and events:

Pullback of a Firming Excess Casualty Market

Perhaps the most talked about topic was the market’s reaction to deteriorating loss trends that are starting to hit insurers’ bottom lines.  Significant umbrella/excess liability losses stemming from a variety of sources are starting to look more like a trend, causing carriers to rethink their strategy of premium float vs. long-term profitability.  Excess capacity still exists in the marketplace, but at either a higher attachment point and/or at an increased cost.  This market uncertainty has led insureds to look at the cost-benefit of their risk buying strategy.  One solution has been to look at increasing primary limits and/or retentions.  Carryover to other lines of insurance is also a possibility, if loss trends continue to deteriorate.

Use of Captives as a Creative Solution

Once a risk financing tool for large corporations, insureds of varying sizes and shapes are exploring the use of captive reinsurers.  The “wait and see” approach of the insurance industry response to both emerging and unique risks leaves insurance buyers looking for creative solutions to properly address evolving exposures. Formalizing the risk retention by using a captive reinsurer is one possible strategy.  Risks such as drones, tenant self-storage, theft/loss coverages, and product liability are all examples of non-traditional risks that can be addressed through a captive reinsurer.  Using the captive to take the first layer of risk pushes traditional markets further away from the working layer of loss and can create more capacity when trying to build higher limits.

While there were many different discussion points in Boston, one thing was clear: The market and insurance needs of corporations are evolving faster than ever and it has become increasingly important to have a partner with the foresight and flexibility to adapt just as quickly. Old Republic has a long history of helping clients navigate difficult market conditions by providing customized solutions for our client’s unique insurance needs. To speak to a member of our team, please visit the Contact Us page.