Reinsurers remain “positively disposed” towards most specialty lines: KBW

Following meetings with executives at the recently held 2024 Rendez-Vous de Septembre (RVS) in Monte Carlo, analysts at KBW have reported that reinsurers remain positively disposed toward most specialty lines, which primarily reflects the rate adequacy achieved in the aftermath of Russia’s invasion of Ukraine.

Analysts also noted that reinsurers remain “broadly positive on cyber risk,” with cyber war exclusions now widely adopted.

In fact, KBW states that the industry’s takeaway from the recent CrowdStrike event is optimism about the effectiveness of improved client cyber hygiene and the effectiveness of waiting periods, “rather than fear over what could have been.”

If you recall, back in July, an automatic update of CrowdStrike’s Falcon sensor software crashed more than 8.5 million Microsoft Windows machines globally.

Earlier this month, Kovrr estimated that the total cost to the UK economy from the outage will likely fall between £1.7-£2.3 billion.

In addition, Hiscox Group’s Chief Underwriting Officer (CUO), Joanne Musselle, recently stated that the CrowdStrike outage is expected to drive greater demand for cyber insurance as it highlighted the risks businesses and individuals are to face when impacted with an event like this.

KBW also noted that recent specialty lines losses like the Baltimore bridge collapse, and a recent plane crash in Brazil “don’t appear to have been big enough to reduce (re)insurers’ appetites for these lines.”

For those in need of a refresher, on March 26 2024, the container ship “Dali” reportedly lost power before passing under the major bridge near the Port of Baltimore, Maryland, causing the vessel to sail uncontrolled into a pillar, resulting in a major collapse.

Shortly after the event, analysts at Morningstar DBRS suggested that insured losses could land between $2 billion and $4 billion.

Following the collapse of the bridge, Marsh, the insurance broker, risk advisor and subsidiary of Marsh McLennan, unveiled a first-of-its-kind $50 million port blockage insurance facility, which is specifically designed to cover loss of revenue caused by third-party accidents.

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