Enoizi: GC well placed to lead charge on state-backed pools to close protection gap

Addressing the protection gap in Europe remains a top priority as secondary perils such as flooding and hail become more prevalent, according to Guy Carpenter’s Europe CEO Julian Enoizi.

Speaking to The Insurer TV in the run-up to this year’s Baden-Baden Reinsurance Meeting alongside Leon Janeke, managing director at Guy Carpenter, Enoizi said there remains a focus on developing more public-private partnerships in the region.

"Governments everywhere are looking for answers on how to manage large-scale risks, especially as climate change accelerates the frequency and severity of natural catastrophes," he stated.

He cited Italy’s recent move to mandate catastrophe insurance for corporates as a prime example of how countries are grappling with these risks. "This is the direction of travel," he emphasised, "and we're actively involved in public-private partnerships to manage difficult-to-insure risks."

Guy Carpenter is positioning itself as a leader in this space, leveraging its global expertise and working alongside government bodies to design risk-sharing mechanisms.

"Public-private partnerships are the talk of the town," Enoizi added, alluding to recent discussions in countries including Portugal, where a state-backed earthquake insurance pool has been proposed following recent seismic activity.

Janeke also offered insights into the evolving market dynamics, noting that Europe’s reinsurance market remains robust despite recent losses.

"We’re seeing a healthy supply of capital in the market," Janeke said, "with excess capacity on our €30bn property portfolio running at about 16-17 percent." Despite localised challenges, Janeke struck a positive tone, pointing to the continued growth of trading partners in the region.

He said market dynamics in Europe were nuanced, with the region seeing a relatively good experience in terms of large losses compared with the past decade.

“Large and cat losses are currently running at around $7bn relative to a 10-year average of around $9bn for a full year.

“When we look at the last three years – which have averaged $16bn a year – the current figure of $7bn that we are tracking seems to be a pretty robust performance.

“That's not to minimise the concerns around secondary perils in any way, shape or form. Clearly, we know there have been significant impacts over the last few years. We've seen plenty of flooding in various parts of Europe. We've seen hail in Italy, France and Germany. So, for us, the key to managing that risk and understanding those exposures is trying to build an underlying view of risk in terms of the perils that are involved.”

Looking ahead to Baden-Baden and the 1.1 renewals, Janeke was optimistic. "Preparation is key," he remarked. "We've never been better positioned to deliver for our clients, with the best data and portfolio insights we've ever had."

Watch the 12-minute interview for more insights into how Guy Carpenter is developing partnerships and driving conversations on state-backed pools