In early June, Ken Brandt, chair, president and chief executive officer of TransRe, sounded the alarm on brewing troubles in the liability reinsurance market that could spill over into a full-blown crisis in a couple years.
Executive Summary
It's easy to make predictions about future market conditions, whether they come to pass or not. But with history as a guide, a series of troubling factors are combining to suggest that liability reinsurance will be less available and more expensive by 2026.During an onstage interview at S&P Global Rating’s 40th Annual Insurance Conference, Brandt cited three disconcerting factors in his negative forecast: higher than expected U.S. casualty losses from the 2014-2019 soft market period, a potentially insufficient market correction in the 2020-2022 period that followed, and inadequate Q4 2023 reserve charges by some reinsurers. “If those bad years are as bad as we think they are, you don’t get out of that with just one reserve adjustment in one quarter in one year,” Brandt said. “I think that we have a serious issue.” (Related article: “Liability Reinsurance Crisis Could Be Looming, CEO Says“)
