PwC’s Jim Bichard stresses importance of net zero goals at 66th RVS

Speaking in an interview at the Rendez-Vous de Septembre (RVS) in Monte Carlo, Jim Bichard, Global Insurance Leader, Partner, PwC, observed that while trading and renewals discussions are important, a longer-term view of the transition to net zero is needed.

Commenting on the primary focus of PwC’s conversations at this year’s RVS, Bichard noted that many of the firm’s clients are re-evaluating their reinsurance programs, particularly in terms of pricing, capacity, placement of their lines, and securing coverage.

“We’ll contribute to that by talking about what we think the factors are. We’ll talk about the risk environment, which is more complex than ever.

“There’s also a lot of price pressure, though there’s a little bit more capacity than last year. The loss experience has been okay, while profitability has been really good,” Bichard said.

However, he noted that PwC’s role is to not just talk about the year-end, but to look forward, expanding more on the role of the industry and how it will evolve.

Bichard went on, “How does reinsurance stay relevant as the risk continues to change? How does the business model evolve? One of our clients mentioned that we need to be thinking more like a bank and structuring the way the products bring capital to meet the risk.

“I think that’s a great way to think about it, because there’s a lot of capital that wants to get into the insurance market because results have been quite good, but they don’t necessarily want to do it traditionally.”

Bichard also emphasised the importance of keeping the global market in mind, noting that the focus extends beyond just Florida and Northern Europe.

“It’s quite easy to just talk about us and Bermuda at RVS, but there’s a lot more than that. It’s different in Japan, it’s different in Southeast Asia, it’s different in Australia, it’s different in South America. How does the reinsurance market behave differently in different parts of the world?” he said.

Bichard continued, “Another topic would be the risks that are being covered. A lot of the coverage is focused on tangible risks, so property and the well-established coverage, not intangible risks, which is quite a big part of what companies worry about now and then.

“The other thing would be how this interacts with the ESG agenda. Most businesses are thinking about the transition to net zero, and they are probably only just at the very beginning of that.”

He concluded, “Most of them have a plan, but how does the insurance industry help that transition? I don’t think we’re talking about that very much at all. It is still quite a rare topic for most insurers.

“The trading discussions are important, the renewals are important, but can we take a bit more of a longer-term view and think about the future?”

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