Axis Re’s Haugh: Property renewals could go down to the wire

Axis Re’s Ann Haugh has warned this year’s renewal discussions could go down to the wire as underwriters seek out opportunities that will provide a “solid return” for shareholders.

Haugh, who serves as president of the reinsurer’s global property business, said underwriters will continue to push for rate adequacy in light of recent loss activity. 

Speaking to this publication as part of #ReinsuranceMonth, she said Axis Re was placing increasing emphasis on portfolio construction to ensure its book has the right balance in terms of peril, territory, product, exposure and client mix. 

“I believe these conditions will create some opportunities. The question will be whether these fit  your sweet spot and how you can take advantage of them.

“Execution is really going to be critical as I think this renewal could come down to the wire,” she said. 

“We need to focus on intelligent risk taking and making sure we’re allocating our capital to the most attractive areas and we need to be smart, disciplined underwriters which are not relying solely on the models while balancing our client franchise and relationships,” Haugh added.

She said underwriters were now placing greater emphasis on ensuring emerging loss trends are reflected in their loss picks at renewal. 

Citing recent figures that show secondary perils generated close to $60bn in global insured losses last year, Haugh said that underwriters are reassessing their exposures to risks that are not well captured by traditional cat models.

“In my mind these exposures are changing the view of risk and we need as underwriters to balance our pricing with that exposure,” said Haugh.

“These secondary perils aren’t always captured well in the models and that’s why we must focus on the importance of risk selection and making sure that we’re reflecting those trends in our loss picks.”

Haugh pointed to recent reports such as that from the UN Intergovernmental Panel on Climate Change, which warned of increasingly extreme weather events, as evidence that the industry must “respond and react”. 

“As an industry, I think we have an opportunity to continue to upgrade our awareness, to leverage technology to have clear, more real-time information to inform decision-making of all our product offerings as the world evolves,” Haugh continued.