Guy Carpenter

A strong outlook for sidecar profits in 2023 is rebuilding investor confidence but one to three years of good performance will be needed to sustain it more fully.

Lloyd’s CFO Burkhard Keese, speaking at Guy Carpenter’s Baden-Baden Symposium, said there are $500mn-$1bn of London Bridge deals in the pipeline.

Top-layer cat risk is attracting additional capacity but reinsurers remain firm on attachment points, the broker said.

The broker studied the impact of 14 major cyber events in its attempt to dispel ILS manager fears of a ‘double whammy’ cyber event that would also impact financial markets.

The supply-demand dynamics are all pointing in ILS markets’ favour, so long as hurricane season goes quietly.

Reinsurance underwriting discipline will not subside even as reinsurers’ willingness to deploy capital increases, the broker said.

The reinsurance broker said the losses will fall on the higher end of industry loss ranges.

Total reinsurance capital will climb to $560bn, ahead of last year but behind the 2021 peak of $570bn.

Greg McBride joins the firm after nearly 18 months at Mt Logan Re.

Reinsurers are less worried about their property books compared to last year, and eyeing development of casualty loss costs due to social and macroeconomic inflation.

Loss-free accounts were generally up 20%-50% at renewal, the reinsurance broker said.

A Guy Carpenter report recently noted that risk models are converging for the most remote risk levels.