www.jltre.

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REINSURANCE
MARKET PROSPECTIVE
WEATHERING THE STORM
2 Reinsurance market prospective | WEATHERING THE STORM

CONTENTS

EXECUTIVE SUMMARY
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2018 REINSURANCE RENEWALS

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A PROSPECTIVE VIEW
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At JLT Re, our trusted team combines

market-leading expertise and proprietary
analytical tools with the freedom to
challenge conventions. We create new
insights and explore innovative capital
solutions tailored to meet client needs.

TOGETHER,
WE DELIVER RESULTS
 www.jltre.com 3

EXECUTIVE SUMMARY

After five consecutive years of falling rates, global property-catastrophe reinsurance experienced
upward pricing pressure at 1 January 2018, with significant variance across regions. This result was
driven in large part by higher loss experience as the sector suffered its most expensive catastrophe
loss year on record in 2017 after hurricanes Harvey, Irma and Maria (HIM) delivered a devastating triple
blow to coastal regions of the United States and the Caribbean. The spate of fierce wildfires in California
towards the end of the year added to loss burdens and, when combined with other significant events,
pushed insured catastrophe losses marginally above USD 140 billion for the first time ever in real terms.
With the vast majority of large losses occurring in the United States, a substantial proportion were borne
by collateralised vehicles and insurance-linked securities (ILS) markets.

Nevertheless, as JLT Re predicted in October1, carriers’ strong RENEWAL OUTCOMES

capitalisation, as well as the nature of the losses in 2017,
Property-catastrophe rate increases were most pronounced
prevented the type of market reaction that had followed other
in regions impacted by loss activity, while low single-digit rises
large loss years. The sector’s existing capital base, as well as
or flat outcomes were more typical for programmes without
new capital inflows in Q4 2017, capped risk-adjusted pricing
significant losses. Although reinsurers sought to stem margin
increases at 1 January 2018 to levels that were below early
compression with more substantial rate rises at 1 January 2018,
market expectations. That said, a pricing floor was seemingly
many ceded ground to clients as the date neared, particularly
reached as reinsurance prices were flat or up for the vast
in non-loss affected areas.
majority of geographies and business lines.

Figure 1: JLT Re’s Risk-Adjusted Global Property-Catastrophe Reinsurance ROL Index – 1992 to 20182 (Source: JLT Re)
280

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100
1992

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2018

1
JLT Re Viewpoint report: Winds of Change, October 2017.
2
JLT Re’s ROL index is risk-adjusted, meaning changes to exposures, as well as premiums, are incorporated.
4 Reinsurance market prospective | WEATHERING THE STORM

Figure 1 on page 3 shows that JLT Figure 2: Dedicated Reinsurance Sector Capital and Gross Written Premiums – 1998 to
Re’s Risk-Adjusted Global Property- FY 2017E (Source: JLT Re)
Catastrophe Reinsurance Rate-on-Line 325

(ROL) Index rose by 4.8% at 1 January 300

275
2018, with levels still below those
250
seen in 2016. The highest increases
225
were recorded in the US, with rates
200
renewing flat to up 5% for loss-free

USD billion
175
programmes and up 10% to 20%
150
for loss-affected business. Flat to 125
moderately up renewals were typical 100
for international property-catastrophe 75

business, reflecting more benign loss 50

activity in Europe and Asia. Even with 25

these increases, the cost of property 0

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

FY 2017E
protection remains competitive with
global property-catastrophe pricing Traditional Alternative Catastrophe bonds

approximately 30% below 2013 levels. Collateralised / sidecars Industry loss warranties Gross premiums

Global market property programmes, As a result, aviation programmes typically which dedicated reinsurance capital
such as retrocession and direct renewed as expiring whilst rate reductions declined (see Figure 2). The sector’s
and facultative (D&F), typically saw moderated for most terrorism accounts. excess position nevertheless remains
higher rate increases at 1 January Marine and energy programmes saw high at USD 45 billion, or about 17%
2018, although these also fell below rates rise on average due to HIM and above gross premiums, having fallen
early market expectations. Despite back-year loss deterioration. by roughly USD 15 billion during the
initial indications that markets would second half of the year.
Negotiations for casualty renewals,
push for more, rates for retrocession
meanwhile, were balanced by As a result, capacity levels continued
catastrophe programmes were generally
profitability pressures on original to be plentiful across most classes of
up by between 10% and 20% on a
business and reinsurers’ desire for business at 1 January 2018. Whilst
risk-adjusted basis, with event-based
higher rates due to the build-up of supply and demand dynamics initially
programmes falling towards the lower
claims. Loss-free casualty programmes tightened in business lines with heavy
end of this range. Lloyd’s and global
therefore typically renewed close to losses, pressures were offset by post-
D&F catastrophe business was typically
expiring levels whilst accounts that HIM capital deployments through
more loss-affected, and this translated
experienced losses saw moderate channels such as new collateralised
into programme risk-adjusted rate
increases. These outcomes were vehicles, post-event funds, new
increases of 15% to 25%, sometimes
often accompanied by lower ceding catastrophe bond issuances and
more for badly hit layers.
commissions. increased stamp capacity and pre-
Impacts spread beyond property lines emptions. Investors responded to
Healthcare classes were mostly flat.
as higher catastrophe and attritional opportunities in both the reinsurance
losses influenced renewals for specialty and retrocession markets, resulting in
and casualty lines. This coincided with CAPITAL MATTERS the replenishment of a significant portion
a growing recognition that rates in The supply of reinsurance capital of lost capacity in time for renewals.
some of these areas had fallen to levels continued to drive the market during
that tested technical profitability after the 1 January 2018 renewal. 2017
successive years of declines. was the first year since 2008 in
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2018 REINSURANCE RENEWALS

PROPERTY & CASUALTY (P&C)

Figure 3: Risk-Adjusted Rate Movements for P&C Programmes Renewing at 1 January 20183 (Source: JLT Re)

US Property-Cat
Western Europe Property-Cat
Asia Pacific Property-Cat
Middle East Property-Cat
Global Direct & Facultative*
Retrocession Property-Cat*
Industry Loss Warranties (US Nationwide)
US Public Entity
US Workers’ Compensation
London Market Casualty
Western Europe GTPL
Western Europe Motor
Middle East Motor
Middle East Energy
Global Facultative**
-25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25%

Average rate change % (loss-free) 2018 2017

* Very few programmes were loss-free for global D&F and retrocession, so the ranges shown reflect loss-affected rate changes.
** Rate changes for global facultative apply to full year 2017 (light blue) and early 2018 (dark blue). Individual programme outcomes varied within the ranges shown for each class of business.

US PROPERTY-CATASTROPHE
• After five years of below-average • Yet, despite the US market alternative markets after most
insured catastrophe losses, the suffering one of its most were able to reload any trapped
US experienced one of the most expensive years ever in 2017, capital in time for the renewal.
destructive hurricane seasons on capacity remained plentiful, Markets were more cautious in
record after hurricanes Harvey, even in peak zones. In fact, providing aggregate covers after
Irma and Maria (HIM) made landfall more capacity was available a number of programmes were
in quick succession. The spate at 1 January 2018 than at the exhausted in 2017.
of fierce wildfires in California corresponding renewal in 2017 as
• The abundance of capacity helped
towards the end of the year new players entered the market
offset any significant upward
added to carriers’ loss burdens. looking for opportunities to
pricing pressure at 1 January 2018
These events inevitably dominated deploy capital at more attractive
and early proclamations (by some)
negotiations during 1 January rates of return. Existing carriers
of substantial rate increases did not
2018 renewals for US property- also maintained (or increased)
materialise.
catastrophe programmes. participations, including

3
Please note that the figures provided in Figure 3 are averages and significant variability exists in individual programmes.
6 Reinsurance market prospective | WEATHERING THE STORM

• Indeed, loss-free layers saw only • These concessions reflected a • Stronger performing cedents
moderate price increases, with a standoff that initially saw markets continued to benefit from
range of flat to up 5% fairly typical sit on firm order terms in the hope favourable terms as markets looked
when adjusted for exposure of precipitating price increases. to nurture relationships and secure
changes. Whilst risk-adjusted rate But as it became clear that supply placements.
increases were higher for loss- was widely available, and the risk
• Terms and conditions were
affected layers, they fell within of churn was real as new markets
generally stable, with cedents
a range of 10% to 20%. Most offered competitively priced
mostly focused on securing the
reinsurers gave way on price in the capacity to steal market share from
best possible outcome on price.
last weeks of December. incumbents, placements were
completed fairly rapidly.

WESTERN EUROPE P&C

• Despite attempts by some • Pricing for loss-free property- historical performance. Renewals
leading markets to increase rates catastrophe programmes was were typically flat (with some
following costly catastrophe predominantly risk-adjusted flat, adjustments according to
losses in North America last with some moderate increases. experience) for these lines of
year, the Western European Catastrophe activity in the region business at 1 January 2018.
reinsurance market experienced was relatively benign in 2017.
• For proportional business, ceding
little change across most lines
• Renewals for other lines, commissions were generally stable.
of business at 1 January 2018.
including property risk, motor Again, historical performance was
Capacity levels were stable, and
and general third-party liability, the key driver here.
remained plentiful.
were very much dependent on

CHINA PROPERTY-CATASTROPHE
• Risk-adjusted pricing for loss-free rise by between 5% and 15%, • Nevertheless, for cedents willing
excess of loss (XoL) property- although even more significant to pay market price, capacity
catastrophe programmes in increases were recorded for remained sufficient at renewal
China typically renewed flat at 1 severely impacted accounts. and there was little evidence of
January 2018. tightening due to elevated global
• The build-up of losses also
catastrophe activity in 2017. As
• China suffered some catastrophe impacted proportional business
a result, firm order terms often
losses in 2017, with Typhoon Hato at 1 January 2018, with ceding
settled below initial quotes.
especially leaving its mark after commissions often determined by
it battered Macau. Hong Kong programme performance. Accounts • Buying behaviours remained
and other southern parts of the that held up well renewed flat, generally unchanged at 1
country were also impacted, albeit whilst programmes that suffered January 2018.
to a lesser extent. As a result, losses saw ceding commissions
loss-affected XoL programmes fall, with declines of between 1%
typically saw risk-adjusted rates and 3% commonplace.
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ASIA PACIFIC PROPERTY-CATASTROPHE

(EXCLUDING CHINA AND JAPAN)
• Property-catastrophe pricing • Ceding commissions for proportional
in the wider Asia Pacific region business renewing at 1 January
remained competitive at 1 2018 were broadly flat in most Asia
January 2018. After the double- Pacific markets, although increases
digit declines of 2016 and 2017, of up to 2.5% were also recorded.
risk-adjusted pricing on average
• Capacity levels remain plentiful
fell less sharply at the 2018
as reinsurers look to strengthen
renewal, with loss-free property-
their presence in the Asia Pacific
catastrophe XoL programmes
region. The excess supply in
typically renewing flat to down
the market was exacerbated by
5%. Nevertheless, some strongly
low losses in 2017. Some large
performing cedents were able
cedents also ceded significantly
to negotiate significantly higher
less premium at 1 January 2018.
discounts, although these were
the exception rather than the rule. • These factors ensured that
the Asia Pacific property-
• Loss activity (outside of Australia)
catastrophe market continued
was relatively benign in 2017. Few
to experience some modest
programmes therefore suffered
softening at 1 January 2018.
major losses but, for those that did,
Whilst some global reinsurers,
rates mostly renewed as expiring,
particularly those impacted by
or with manageable 5% increases.
elevated catastrophe losses
• Loss-affected programmes in in North American in 2017,
Australia, nevertheless, saw rate attempted to withstand cedents’
increases of up to 20%. This attempts to negotiate price
was due in large part to Tropical discounts, placements were
Cyclone Debbie’s landfall in over-subscribed and other
Queensland. international markets took up or
absorbed their shares by giving
way on price and agreeing to
risk-adjusted rate reductions.

“ After the double-digit declines of 2016 and 2017, risk-adjusted

pricing for Asia Pacific property-catastrophe business fell less
sharply at the 1 January 2018 renewal, with loss-free XoL
programmes typically renewing flat to down 5%.”
8 Reinsurance market prospective | WEATHERING THE STORM

MIDDLE EAST AFRICA P&C

• After four consecutive years of • There were several risk losses • Capacity remains plentiful and
double-digit rate reductions in in 2017, with one major event in was relatively stable at 1 January
the Middle East P&C market, a the Middle East Africa region (the 2018. That said, regulators are
changing environment emerged Abu Dhabi National Oil Company closely scrutinising underwriting
at the 1 January 2018 renewal as (ADNOC) refinery fire) affecting standards: as a result, some
margin compression and regional most regional reinsurers. Several markets may come under
loss activity led to relative rate impacted risk XoL programmes increased pressure to merge.
stabilisation in several lines of suffered rate rises of between At the same time, certain well-
business. 5% and 15% at 1 January 2018. rated reinsurers are looking to
And increases could continue move into new product lines such
• The global catastrophe losses
through 2018 as other affected as cyber, aviation, credit and
of 2017 had only a moderate
programmes renew up to and agriculture in order to unlock new
influence on renewals in the
including 1 July. growth opportunities. But skill
Middle East. Regional losses
shortages in the underwriting
had more impact, with large • Loss-free energy programmes
field are currently impeding
risk losses, as well as mounting typically renewed flat on a risk-
these initiatives.
attritional claims, preventing any adjusted basis, although there was
further rate reductions. significant variability depending
on risk exposures. Loss-affected
• As a result, pro rata bouquet
energy programmes saw rates rise
treaties (that include property,
by up to 10% after the ADNOC
engineering, general accident
loss, and other significant events “ A changing environment
and marine risks) renewed on an
that included a refinery fire in Ivory
as-expiring basis, or with slightly emerged for the Middle East
Coast and the Sohar aluminium
improved terms for reinsurers, in
plant loss in Oman.
Africa P&C market at the 1
line with last year.
January renewal as margin
• In an effort to address poor
• Risk-adjusted pricing for loss-
technical results for motor
compression and regional
free XoL property-catastrophe
business, regulators in Saudi loss activity led to relative
programmes was typically
up by approximately 5% at
Arabia and United Arab Emirates price stabilisation, replacing
imposed minimum deductibles and
1 January 2018. Regional double-digit rate reductions.”
rates in both countries. Increased
property retrocession loss-
regulatory action continues to
free programmes, meanwhile,
spread across the region, with
renewed flat to up 5% on a risk-
new standards being imposed
adjusted basis. Although rate
in the motor and medical arenas
reductions abated, the outlook for
in particular. This manifested
the Middle East property market
during the 1 January 2018
remains challenging, with loss
renewal as pricing for motor XoL
ratios in the high 90s.
programmes increased by 5% on
average. Carriers are increasingly
adopting cautious approaches in
order to follow various regulatory
requirements.
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GLOBAL DIRECT AND FACULTATIVE

• Renewal outcomes in the global There were, nevertheless,
D&F market varied significantly significant variances around this
at 1 January 2018 and were very range, with badly hit layers seeing
much unique to each cedent, higher increases. Firm order terms
with loss experiences and typically settled below initial quotes
risk exposures key discerning as markets ceded ground during
factors. Additionally, long-term the renewal process.
relationships played an important
• Capacity remained plentiful at
role in differentiating cedents
1 January 2018 as alternative
during renewal negotiations.
markets successfully reloaded
• Generalisations about D&F and traditional markets responded
property renewals at 1 January by looking to write more. Cedents
2018 are therefore difficult to mostly stuck with existing panels.
make as every programme offered Budget spend was a key driver in
its own set of circumstances most cedents’ buying appetite.
that needed to be evaluated
• D&F risk excess renewals,
individually. For example, cedents
meanwhile, were dependent on
with higher attachment points
portfolio mix and loss experience.
that hit only lower layers typically
With many programmes excluding
saw more favourable pricing
losses emanating from critical
outcomes, whilst those that saw
catastrophe zones, hurricanes
losses impact higher layers often
Harvey and Irma had less
translated into more substantial
impact. However, Caribbean (for
price increases.
those that had cover), Mexican
• Uncertainty around the total earthquake and California
insured cost of Hurricane Maria wildfire losses did affect some
added to complexities during the programmes.
renewal process, and these were
• General market appetite for
compounded further by the fact a
higher rates led to even loss-
number of cedents had reduced
free renewals seeing minor
exposure levels through 2017 in
price rises, although these were
response to the prolonged soft
generally less than 10% and
market environment.
small in monetary terms.
• All this notwithstanding, global D&F
catastrophe programmes broadly
saw rates rise by between 15%
and 25% on a risk-adjusted, like-
for-like basis at 1 January 2018.
10 Reinsurance market prospective | WEATHERING THE STORM

RETROCESSION
• Although insured catastrophe of trapped capacity being used by • These dynamics meant that rates
losses reached record levels in some to talk up rates during early for retrocession catastrophe
2017, retrocession renewal prices negotiations, virtually all alternative programmes were generally up
at 1 January 2018 fell below markets were able to replenish by between 10% and 20% on a
reinsurers’ early expectations. lost or locked capital. New risk-adjusted, like-for-like basis at
The mid-sized nature of the collateralised vehicles were also 1 January 2018, with event-based
catastrophes mitigated losses launched in time for the renewal. programmes falling towards the
for occurrence covers, with only lower end of this range.
• Competition was exacerbated
Hurricane Irma having any sort of
by traditional reinsurers looking • Ceding commissions for pro-
impact. Even then, generally only
to increase their retrocession rata treaty placements remained
lower layers sustained losses. The
participations in an attempt to exploit flat at 1 January 2018, but
succession of catastrophes in 2017
the firming pricing environment. aggregate/occurrence caps
did, however, hit aggregate covers
Whilst their objective was not were moved to reflect expected
more significantly.
ultimately met (as pricing did not growth on certain accounts.
• Supply and demand forces played spike to anticipated levels), it all
a key role in preventing more culminated in retrocession capacity
substantial pricing corrections at levels being higher in 2018 than at
1 January 2018. Despite the issue the corresponding renewal in 2017.

INDUSTRY LOSS WARRANTIES

• The industry loss warranty (ILW) • Capacity levels were sufficient at 1 • But reduced demand was the
market experienced significant January 2018. Although markets key driver during ILW renewals.
losses in 2017, and rate increases were initially cautious, possibly The ILW market is often linked
ensued at 1 January 2018. reflecting uncertainty over the to shortages of capacity in other
amount of trapped capital, this areas, the ultimate net loss (UNL)
• Risk-adjusted pricing for loss-free
eased gradually as claims from retrocession market especially.
US nationwide covers rose by
HIM seemed to develop favourably. Catastrophe bond capacity is also
between 5% and 12.5% whilst
(Estimates for the Californian increasing. Given that supply here
regional coverage saw more
wildfires, on the other hand, have remained plentiful at 1 January
moderate increases of between
increased.) Nevertheless, reinsurers 2018, a number of cedents looked
5% and 7.5%.
took a different and more sceptical to mitigate ILW price increases by
• Loss-affected ILW covers saw view of second and third event switching to UNL.
significant rate increases, ranging pricing by either narrowing the
from 20% to 30% plus, although breadth of cover (named storms
very few renewed at 1 January only instead of wind or all natural
2018 due to these more stringent perils) or retreating to higher levels.
terms. Most loss-affected ILWs There was also resistance to
were low-level frequency covers attempts to broaden the scope of
(such as second-event USD 10 cover to include US territories and
billion US wind or third-event USD 5 possessions.
billion US all natural perils).
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US PUBLIC ENTITY
• Elevated losses in 2017 impacted • Loss-affected programmes saw • Capacity levels were largely
the US public entity market at 1 more significant upward pricing stable, although 2017 catastrophe
January 2018, with a number of pressure in reaction to losses, with losses did cause some tightening
cedents seeing moderate price property up by an average of 10% on for property business. Capacity
increases to their reinsurance a risk-adjusted basis. Loss-affected levels for liability and workers’
programmes overall. liability and workers’ compensation compensation placements were
programmes also recorded rate sufficient.
• Loss-free XoL programmes for
rises, albeit at a more moderate
property saw risk-adjusted price • Whilst tightening for property
pace of 5% and 4%, respectively.
increases of 4% on average at business was anticipated, building
1 January 2018. Liability and • Ceding commissions for liability losses also manifested at
workers’ compensation business proportional business reflected renewal, leading to some pricing
mostly renewed flat. this slight tightening, being flat to pressure in this space.
marginally down at 1 January 2018.

US WORKERS’ COMPENSATION
• Renewal outcomes for workers’ • Despite this, firm order terms
compensation (WC) business were generally settled at the lower end
bifurcated at 1 January 2018. Whilst of quoting ranges for the WC
risk-adjusted XoL pricing for WC market overall, with programmes
“ Renewal outcomes for
catastrophe layers typically ranged often being bound at the lowest or workers’ compensation
from flat to down 5%, per person second lowest quote. business were bifurcated at
layers renewed flat to up 10%.
• Reinsurers exhibited more 1 January as risk-adjusted
• Capacity for WC programmes was willingness to provide broader pricing for catastrophe layers
generally sufficient at 1 January coverage rather than lower pricing.
ranged from flat to down
2018. But here again there were For example, Maximum Any One
some important differences Life (MAOL) provisions continued to 5% whilst per person layers
between catastrophe and per increase, with up to USD 20 million renewed flat to up 10%.”
person layers. Whilst the record- being offered in some cases.
breaking catastrophe losses of
• More favourable terms
2017 had no discernible impact
encouraged changes in buying
on WC renewals, the build-up of
behaviours, with more cedents
large individual losses over the
exploring reserve development
last year or so did manifest. As
mitigation strategies, including
a result, some markets reduced
adverse development covers and
their line sizes for per person
aggregate stop loss covers.
layers over concerns about pricing
levels. Whilst there was still enough
capacity to get placements
subscribed, some per person
layers had to be re-firm ordered.
12 Reinsurance market prospective | WEATHERING THE STORM

LONDON MARKET CASUALTY

• 1 January 2018 renewals for 1 January 2018, although outcomes 2018. This enabled cedents to be
London Market casualty business varied significantly depending on aggressive during negotiations, a
were completed late. This reflected programme size and placement strategy that often proved to be
uncertainty surrounding business longevity. Tweaks to structures and successful as firm order terms fell
plans and the UK discount conditions on occasion facilitated below reinsurers’ expectations. That
(Ogden) rate. Cedents also held technical rate increases for markets. said, markets were willing to reduce
back to gauge the direction of lines if they felt required margins
• Loss-affected programmes saw
property-catastrophe pricing before were not being achieved.
modest rate increases, in the order
committing to orders and structures
of 3%. Experience was again the • Reinsurers also attempted to reduce
on long-tail business.
main driver at 1 January 2018. Of commission levels for proportional
• As a result, expectations between course, Ogden changes significantly business at 1 January 2018, but
cedents and markets were impacted UK business that was with limited success. Cedents stood
narrower than in the recent past. likely to incur bodily injury claims. firm and ceding commissions were
Whilst reinsurance rates for There was considerable uncertainty generally aligned to experience and
London Market casualty business in the market over how to treat reinsurers’ margins. Whilst there was
did not harden significantly at 1 the most recent revision to the no uniform market reaction for pro-
January 2018, market conditions Ogden rate, but pricing for bodily rata renewals, commission levels on
may continue to firm through injury business generally settled at new proportional treaties were not
2018, partly to demonstrate between up 10% and up 25%. as favourable to cedents as they had
technical rate increases. been in prior years.
• Capacity levels remained abundant
• Risk-adjusted pricing for loss-free during the renewal. In fact, slightly
XoL programmes was typically flat at more capacity was available in

GLOBAL FACULTATIVE
• The global facultative market during the first half of 2017, they on average, with more significant
continued to soften for much of ended the year down up to 10% increases in Asia Pacific. Casualty
2017, although a general trend for terrorism and flat to down 5% business saw similar outcomes.
towards rate stabilisation emerged for property. Due to low premium
• Construction, meanwhile,
during the second half of the levels for casualty business,
was down 10% to flat as an
year for certain lines of business. pricing for loss-free programmes
overall market (recognising that
Pockets of rate increases were typically renewed within a range of
construction all risks (CAR)
recorded in Asia Pacific (Australia flat to down 5%, with outcomes in
projects are, of course, not
and New Zealand especially). Asia Pacific trending towards the
renewals). However, significant
higher end of this range.
• Rates varied significantly across rate increases of up to 20%
classes in 2017. Loss-free property • Pricing for loss-affected facultative were seen for wood frame CAR
and terrorism business saw price business was mostly up in 2017, projects due to losses in the
reductions moderate through the although the magnitude of the area and reductions in capacity,
course of the year. Whereas rates increases varied depending on particularly in the US.
for both lines fell by as much as the size of the loss. Property
20% to 25% in most territories accounts renewed flat to up 10%
 www.jltre.com 13

• Capacity overall remained • Overall, surplus capacity in the • Supply is likely to grow in 2018. In
plentiful in 2017 despite market market proved to be a double- addition to the new capacity that
withdrawals (such as Novae edged sword. Whilst innovative entered the market at the turn of
Syndicate, Navigators Syndicate, facultative solutions were the year, other start-ups could
Brit Syndicate and Axis) as these available for upfront carriers launch in the coming months.
were more than offset by new to use to protect or arbitrage, Global reinsurers are also looking
entrants. These included Kemah placements on the retail side to grow their facultative incomes
Capital (writing on behalf of were often oversubscribed, in 2018.
Berkshire), Rokstone Re backed leading to carriers being left off
• The overall trend of price
by Best Meridian International, One risks or having reduced shares,
stabilisation is likely to continue
Underwriting backed by Standard and therefore reduced
for the first half of 2018, although
Syndicate and Geo Specialty facultative orders.
the direction of travel will be
backed by Lloyd’s syndicates.
• Demand for facultative cover influenced by losses during this
• The record insured catastrophe was stable to moderately up period. Should claims continue
losses of 2017 had little impact in 2017. Whilst major global to spiral upwards, some capacity
on supply. In fact, a number of carriers bought more facultative may start to withdraw from loss-
existing markets, Lloyd’s syndicates protection to reduce net making regions or classes, which,
especially, increased capacity retentions, others pursued more in turn, could see more significant
subsequent to these events, some centralised buying strategies that upward pricing pressure.
with immediate effect. Capacity resulted in reduced facultative
therefore continued to be bullish placements.
during the last quarter of 2017.

STRUCTURED REINSURANCE
The structured reinsurance market is split into two main types of transactions: prospective cover (protection for future
underwriting) and retroactive cover (protection for existing reserves).

PROSPECTIVE MARKET RETROACTIVE MARKET

• Pricing in the prospective market continued to • Supply and demand in the retroactive market increased
experience downward pressure for much of 2017. in 2017, as a growing number of markets were prepared
Supply remained plentiful as a growing number of to offer cover in reaction to cedent requirements.
markets offered new capacity. The distinction
• Changing fiscal and regulatory environments continue
between structured and traditional reinsurance
to impact the retroactive market. For example, federal
continued to be blurred.
tax changes in the US are likely to affect the structure
• The impact of HIM and other elevated catastrophe of covers as they will no longer be able to run through
losses in 2017 has yet to play out in the prospective affiliated companies without being subject to 10% tax
market, although more demand could materialise on premium.
in Q1 2018 after cedents’ traditional reinsurance
• Nevertheless, the retroactive market remained vibrant
placements are completed in January. Nevertheless,
during 2017. And continued growth is expected in 2018
growth in new markets could slow if traditional covers
amidst strong competition from markets and sustained
see significant rate increases.
demand from cedents seeking solutions that offer both
capital relief and finality.
14 Reinsurance market prospective | WEATHERING THE STORM

SPECIALTY
Figure 4: Risk-Adjusted Rate Movements for Specialty Programmes Renewing at 1 January 20184 (Source: JLT Re)

Aviation
Marine & Energy*
Terrorism & Political Violence
-25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25%

Average rate change % (loss-free) 2018 2017

* Very few programmes were loss-free for Marine & Energy, so the ranges shown reflect loss-affected rate changes.

AVIATION • Capacity levels were stable but • As a result, risk-adjusted pricing for
remained plentiful. There were no marine & energy programmes rose
• XoL aviation programmes typically
significant changes to terms and by an average of 4.9% at 1 January
renewed flat on a risk-adjusted basis
conditions. 2018. There were, nevertheless,
at the 1 January 2018 renewal. This
significant variances around this
compared to declines of up to 10% at
figure, with outcomes ranging from
the corresponding renewal in 2017. MARINE & ENERGY
down 4% to up 12%. This compared
• The outcome in 2018 was balanced • Despite marine programmes being to a range of down 17% to down
by abundant capacity and low loss materially impacted by cargo and 8% at the corresponding renewal in
experiences on the one hand (there yacht losses as a result of HIM, loss 2017.
were no major airline fatalities in ratios generally remained below 100%
in 2017 and many reinsurers achieved • Despite initial reinsurer resistance,
2017) and reinsurer resistance to
satisfactory returns from the sector. ceding commissions remained
further decreases on the other.
unchanged for proportional
• This market resolve stemmed • Risk-adjusted pricing trends for business. There was increased
more from a growing recognition marine & energy programmes at 1 demand from marine buyers for
that aviation reinsurance rates had January 2018 moved from negative pro rata programmes at 1 January
started to test levels of technical to positive territory for the first 2018 whilst energy quota share
profitability rather than any time in four years. The impetus for placements reduced for the second
wider impact from the elevated this reversal came primarily from consecutive year.
catastrophe losses of 2017. In increased reinsurer resolve to deny
risk-adjusted rate reductions. This • Capacity levels remained plentiful,
fact, changing market approaches
stemmed in large part from HIM’s with new market entrants
to aviation placements were first
impact and a reminder of how little struggling to access established
observed in July, before HIM had
current pricing levels account for programmes and there was limited
made landfall.
natural catastrophe risks given the new business for the market to
• Insurance carriers benefitted from sector’s exposures. Changes to write. Once firm order terms had
increased premiums in late 2017 trapped exposure, as well as back- been granted, following markets
due to underlying exposure growth year deterioration (due to losses provided at least the same level of
in fleet values and passenger such as Siri, SBM and Tullow), also support as 2017.
numbers. had an impact.

4
Please note that the figures provided in Figure 4 are averages and significant variability exists in individual programmes.
 www.jltre.com 15

• The Joint Excess of Loss Committee shooter, loss of attraction and cyber CYBER
proposal to update market standard terrorism. The latter is now more
• The cyber (re)insurance market
wordings was applauded widely by widely included in terror policies,
continues to grow strongly as the
the market (particularly in aligning although aggregations are being
frequency, scale and sophistication
contracts with the Insurance and closely monitored.
of cyber attacks fuels demand.
Enterprise Acts). However, when
• Both commercial and certain terror
confronted by a challenging renewal • There were several high-profile cyber
pools are adapting their products to
season, many buyers preferred closer attacks in 2017. In addition to individual
include different types of non-damage
references to expiring wordings. data breaches (involving companies
cover and provide customers (for
such as Deloitte, Equifax and Uber),
• The marine & energy sector has been example, regional small and medium-
some incidents transcended sectors
a source of underwriting profit for sized enterprises that previously did
and geographies, with the WannaCry
reinsurers over the last two years, and not buy terrorism insurance) with
and NotPetya ransomware attacks
margins look set to improve as pricing much-needed resilience against
in particular grabbing headlines given
has swung from down 17% to up 5% these new threats.
their global impacts. Despite this,
during this period. The same cannot
• Underlying exposures increased in losses to the cyber (re)insurance
necessarily be said for their insurance
2017 against a largely flat income market were moderate, although the
counterparts and the probability of
base. This impacted XoL renewal issue of ‘silent’ cyber risk manifested
maintaining pricing momentum will
pricing at 1 January 2018 and, in during the course of the year.
rely heavily on insurers’ ability to sell
general, programmes renewed with
rate through the year. • Most cyber insurers continued to
flat ROLs, against average reductions
see large (double-digit) increases in
of 10% last year. When adjusted for
income in 2017 as new business
TERRORISM & exposure changes, 2018 flat renewals
generated significant exposure
POLITICAL VIOLENCE equated roughly to a 10% reduction
growth. Whilst XoL loss-free
on a risk-adjusted basis, although
• Despite a number of tragic, terrorist programmes typically renewed
there was significant variance to this
attacks in 2017 in advanced and with moderate ROL increases at 1
depending on the composition of the
developing countries, insured losses January 2018, this represented a
cedent’s portfolio.
were modest and virtually none favourable outcome for cedents on a
triggered reinsurance payouts. • Pro rata treaties mostly renewed with risk-adjusted basis. Firm order terms
as expiry terms and conditions. were typically agreed within 10% of
• This reflects the changing nature of
original quotes.
the terrorist threat, where motivations • In terms of results, the class remains
for attacks are now more focused highly profitable, although the addition • Most quota share cyber programmes
on causing mass casualties (often of increased underlying exposures performed well in 2017, prompting
creating non-damage business and broadening coverages has, and some cedents to apply pressure
interruption) rather than triggering will, further increase attrition. to increase ceding commissions at
catastrophic property damage. The 1 January 2018. This was mostly
• Capacity was largely stable at 1
threat of large-scale terrorist attacks resisted by reinsurers, and ceding
January 2018, with a limited number
that cause significant property commissions typically renewed at
of new entrants joining the market.
damage remains, however. expiring levels.
• Reinsurance buying patterns remained
• The insurance market is looking to • Capacity levels were generally
similar to prior years, although more
address the ‘non-damage’ issue sufficient at renewal, with additional
cedents purchased aggregate layers
by closing current protection gaps capacity from a limited number of new
to allow more flexible recoveries and
and offering cover that includes non- participants increasing competition.
better manage claims erosion.
damage business interruption, active
16 16 Reinsurance market prospective | WEATHERING THE STORM

HEALTHCARE
Figure 5: Risk-Adjusted Rate Movements for Healthcare Programmes Renewing at 1 January 20185 (Source: JLT Re)

Accident & Health Catastrophe

Medical Benefits Per Person
North America Med Mal (Treaty)
-25% -20% -15% -10% -5% 0% 5% 10% 15% 20% 25%

Average rate change % (loss-free) 2018 2017

ACCIDENT & HEALTH

• Three key factors influenced • An abundance of capacity acted • Overall, A&H renewals reflected
accident & health (A&H) placements as a counterweight to price growing reinsurer resolve at
at 1 January 2018: major US increases. 2017 saw a number 1 January 2018. But with firm
catastrophe losses in Q3 and Q4 of new London market entrants order terms not meeting early
2017, accident and disability loss (including China Re, Barbican renewal season expectations,
activity from late 2016 into 2017 and and Noa) whilst Starstone also markets often focused on
continued capacity abundance. expanded its A&H reinsurance maintaining core accounts
platform. In the face of any and had no compunction in
• Whilst the impact of 2017 global
reluctance to support terms dismissing what they saw as
catastrophe losses (HIM and the
from existing panels of inadequately priced, non-core
California wildfires especially)
reinsurers, brokers were able to business. This happened solely
was probably more muted in
turn to any/all of the above. on programmes where final
this market than others, it was
terms deviated significantly from
nevertheless a factor. Some • These interacting drivers generally
what quoting reinsurers were
markets were adamant that saw loss-free XoL programmes
targeting, although local markets
capacity would be reallocated to renew at expiring rates at 1 January
were ready to pick up any slack.
other sectors if they were unable 2018. There were some exceptions
Also indicative of tensions during
to generate targeted returns. – rate reductions were recorded
this renewal was the number
when cedents’ premium bases
• Three subsectors came under of placements which had to be
had increased substantially. Loss-
heightened scrutiny following referred to underwriting committees
affected programmes, meanwhile,
losses: US professional or chief underwriting officers.
typically renewed within a range of
sports (loss of value contracts
up 5% to up 10%.
especially), Australian income
protection and contract • Firm order terms often settled below
protection indemnity – the initial quotes for Asian accounts.
coverage type bought by For non-Asian business, firm order
Disney which paid a claim of terms tended to be as quoted.
approximately USD 50 million
• Ceding commissions for proportional
following the death of actress
business were typically flat.
Carrie Fisher in late 2016.

5
Please note that the figures provided in Figure 5 are averages and significant variability exists in individual programmes.
 www.jltre.com 17

NORTH AMERICA MEDICAL MALPRACTICE (TREATY)

• The medical professional liability evidence of competition between
market at 1 January 2018 reflected London markets and domestic
profitability pressures on original reinsurers, with the latter looking to
business and reinsurers’ desire for steal market share by developing
increased pricing. Whilst several relationships and supporting the
cedents are in a loss-free position reinsurance of their own peer group
with reinsurers, terms have eroded as a potential avenue towards M&As
in recent years and margins are and strategic partnerships. Strong
being squeezed. There was therefore competition between markets
a standoff at renewal as some helped suppress price movements
reinsurers pushed for rate increases during the renewal.
to offset pockets of deterioration in
• Firm order terms mostly settled
their books. Cedents resisted, citing
at the lower end of quoting
strong reinsurer profits in this space
ranges, although this was not
over the last few years.
universally the case. In fact, there
• As a result, loss-free XoL were some instances where firm
programmes or programmes order terms had to be reissued
where losses fell within the to secure reinsurer support. This
expected tolerance range typically predominantly was not price driven,
renewed flat at 1 January 2018. but more a case of cedents wanting
With cedents’ subject premiums to secure backing from specific
appearing to be stabilising, a markets.
flat rate likewise achieved flat
• Capacity levels remained relatively
dollars. But there were significant
stable at 1 January 2018, but some
variations around this outcome.
markets have clearly become far
Some programmes recorded rate
more selective and price conscious.
decreases in excess of 5%. In these
And whilst there have been a
instances, London markets reduced
number of new market entrants into
authorisations, although domestic
the medical malpractice space since
reinsurers were often willing to
2014, they are increasingly adopting
absorb shortfalls. Additional or
hard lines as they lack redundant
broadening coverages were priced
reserves accrued from strong
for at 1 January 2018, whereas they
results in the early 2000s.
generally had not incurred additional
premium charges in prior years. • Ceding commissions generally fell
at 1 January 2018.
• Rate movements for loss-affected
programmes were very much
dependent on the overall level of
loss. As a result, rate increases on
loss-affected programmes generally
fell within a wide range of 2% to
20%. But, even here, there was
 18 Reinsurance market prospective | WEATHERING THE STORM

A PROSPECTIVE VIEW:
WHAT TO WATCH IN 2018

Recent weeks and months have once again demonstrated the resilience of the reinsurance market and
its ability to trade through trying times. During this time, carriers have paid out billions of dollars in claims
without incurring significant capital impairments or any rating agency downgrades. The 1 January 2018
renewal was also conducted in an orderly manner. This is some achievement given that 2017 was
the most expensive catastrophe loss year on record (see Figure 6). Following several years of below-
average catastrophe losses, last year was a reminder that carriers must prepare for higher levels of
catastrophe losses in future years. After all, insured catastrophe losses have now exceeded USD 100
billion three times in the last 15 or so years.

Figure 6: Global Insured Inflation-Adjusted Catastrophe Losses – 1970 to 2017E6 (Source: JLT Re, Swiss Re)

160 450

140 400

120 350
USD billion (inflation-adjusted)

300
100

250
80

200

60
150

40
100

20 50

0 0
2017E
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016

Seismic Meteorological Man-made 10-year moving average Number of events (RHS)

As the market bids farewell to a turbulent 2017 and enters 2018, JLT Re has identified 10 key factors that are likely to shape the
reinsurance market over the next year, with potential implications for sector capital and pricing. These will be analysed in detail at
the inaugural JLT Re market event on 25 January. Three areas of particular importance – catastrophe models, alternative capital
and reserving – are briefly discussed here.

6
Includes National Flood Insurance Program (NFIP) claims.
 www.jltre.com 19

1. CATASTROPHE Figure 7: Loss Estimates for HIM by Catastrophe Modelling Company7 (Source: JLT Re,
AIR, CoreLogic, KCC, RMS)
MODELS
If some of the estimates put forward AIR high
by the major commercial modelling
AIR low
companies are to be believed, the
market could see significant revisions
to losses through 2018. Whilst current
CoreLogic high
market consensus suggests Q3 2017
catastrophe claims for the private Corelogic low
market could reach USD 80 billion in
total, the range offered by modelled
industry losses was far greater. In fact, KCC
in the weeks after HIM made landfall,
estimates varied from USD 65 billion at
the bottom end to as high as USD 145
RMS high
billion – a spread of USD 80 billion.
RMS low
Figure 7 shows the high and low
post-landfall estimates provided by 0 20 40 60 80 100 120 140 160
Insured loss estimates (USD billion)
different vendor modelling firms for
HIM. Subsequent revisions made Harvey Irma Maria

to estimates are also captured in

of opinion over Maria’s windfield size (including Puerto Rico), along with
the chart, with the patterned and
at landfall, ground-up exposures, additional category 3-5 damage in other
filled (combined) entries of the same
repair costs, population migration parts of the Caribbean. Conversely, the
colour representing initial estimates
and insurance coverages and terms models may have underestimated how
and the filled entries showing most
(for business interruption especially) well newer buildings performed during
recent updates. The fact that three
in Puerto Rico. Even after AIR issued the hurricane onslaughts due to more
landfalling hurricanes in the world’s
a revised estimate for Maria several stringent building codes in the US and
most comprehensively analysed peak
weeks after landfall, glaring differences Caribbean. This is especially relevant
risk region generated such enormous
remained. The same can also be said given the amount of new construction
ranges in modelled estimates raises
for existing estimates issued for Harvey that has taken place in Florida alone in
questions over whether modelling tools
and Irma. the past 10 to 15 years.
can be relied upon to produce credible
information for real-time and post-event Some of this can perhaps be explained Catastrophe models are, of course,
catastrophes. by the various assumptions each built to provide probabilistic outcomes
modelling company makes in calculating for tail scenarios rather than predict the
Hurricane Maria in particular led to
industry loss estimates. Whereas monetary cost of any single event. But
highly divergent views between the
previous years saw recorded losses far given the unusually large divergences
modelling companies. In fact, AIR
exceed modelled losses, the opposite of loss estimates, their performance
Worldwide’s original top-end Maria
seems to have been true in 2017. is likely to come under close scrutiny
estimate was nearly three times that of
Indeed, some modelling companies this year, particularly if they result in
RMS and KCC. Strikingly, there was no
may have overreacted to the demand significant model revisions (as they did
overlap between AIR’s bottom estimate
surge component after three category 4 in 2005 and 2008 following hurricanes
and its competitors’ highest. The gulf
hurricanes made landfall in the US Katrina and Ike, respectively).
stemmed in large part from differences

7
Excludes NFIP loss estimates.
20 Reinsurance market prospective | WEATHERING THE STORM

In addition, there is still considerable warning that that the sizeable losses capping rate increases seen at 1
scepticism around RMS’s medium- sustained by collateralised markets January 2018. It also reflects investors’
term rate (MTR) view of hurricane and ILWs in particular would lead growing confidence in the reinsurance
risk, particularly over whether Atlantic to widespread double-digit rate asset class. Investors undertook
Ocean temperatures are cooling and increase at the 1 January 2018 extensive due diligence before
the proposed link to a reduced landfall renewal. Trapped capital became new committing funds to the sector and
frequency of hurricanes. With RMS in buzzwords amidst predictions that were well prepared for these losses. In
2017 cutting its five-year hurricane landfall alternative capacity would freeze until fact, given that claims mostly fell within
projections below the long-term average incurred losses were quantified. risk tolerance ranges, allocations could
for Texas, the Gulf Coast, Florida and the increase further through 2018. There
Just a few months on, these concerns
Southeast, important questions are raised was certainly no let-up in catastrophe
can be put to rest. As Figure 8 shows,
over whether this forward-looking view is bond activity during Q4 (as Figure 9
a significant chunk of lost capital in the
useful to the (re)insurance sector. This is shows), where issuance was above the
alternative market was replenished in
particularly pertinent after two category 10-year average.
time for the renewal, with substantial
4 hurricanes hit Texas and Florida last
capital raising taking place for sidecar Cedents can therefore reasonably
year, and it comes just a few years after
vehicles, in addition to significant new expect this source of reinsurance
RMS was recommending a view of risk
(i.e. not renewal) catastrophe bonds capacity to persist for the long-
that called for above normal-landfall
issuance. And claims for the most part term. The implications for traditional
between 2006 and 2012, which never
have been paid speedily and efficiently. reinsurers are more ominous,
materialised. Such regular changes can
however, as it seems they can no
be disruptive to the sector as they have The fact that much of this capacity was
longer rely on post-event price hikes
significant implications for risk perceptions deployed at a lower rate of return than
to boost profitability, regardless of the
and calculated loss amounts. many predicted immediately after HIM
magnitude of the loss.
made landfall played a crucial role in

2. ALTERNATIVE Figure 8: Announced New Reinsurance Capital – Q4 2017 (Source: JLT Re)
CAPITAL
Although 2017 will no doubt be Bubble size = Capital amount USD 100m
remembered for the succession of
costly catastrophe strikes in North
America, just as important to both
reinsurance buyers and sellers was the
performance of the ILS market.

How alternative capital providers would

respond to major losses had been a
growing source of speculation in the
reinsurance market. Some questioned
their long-term commitment to
reinsurance whilst others predicted
a spike in legal action over disputes
1 Oct 17 1 Nov 17 1 Dec 17 31 Dec 17
during the claims settlement process.
Anouncement date
These voices grew louder following
HIM, with certain market participants Sidecars Catastrophe bonds
 www.jltre.com 21

Figure 9: Catastrophe Bond Issuance by Quarter – 2006 to 2017 (Source: JLT Re)

14,000 35,000

12,000 30,000

10,000 25,000

8,000 20,000
USD million

USD million
6,000 15,000

4,000 10,000

2,000 5,000

0 0
2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017
Q1 Q2 Q3 Q4 Capital outstanding (RHS)

3. RESERVING CYCLE However, after more than a decade of The analysis implies that the sector
favourable development, the reserving continues to be in a danger phase
The implications of reserving for the
cycle is back under the microscope in which carriers are continuing to
(re)insurance sector are difficult to
amidst concerns that it has reached an release large amounts of reserves
overstate. Loss reserves are typically the
inflection point. even as accident year experience
largest single item on balance sheets,
indicates that redundancies are
and significant reserve development Reserve adequacy is notoriously
diminishing. But there are early signs
can heavily impact profitability and difficult to predict but JLT Re in 2016
this could now be changing – Q4 2016
capitalisation. In fact, it was the liability conducted an exhaustive analysis of
was the first time in over eleven years
crisis of 2001-2005 which most recently reserving trends which identified early
that P&C carriers experienced net
came closest to pushing the sector over evidence of isolated net calendar year
reserve strengthening. This could be a
the brink. reserve deficiencies8. This research
critical milestone if this trend becomes
has been updated to show reported
The irony is that this bane of insurers’ more sustained in 2018. Reserve
calendar year reserve movements
existence became a boon for a deficiencies, after all, have historically
by quarter for the top 30 global
number of years after the financial sustained hardening markets.
(re)insurance companies up to Q2
crisis. During this period, carriers
2017 (see Figure 10 on page 22).
released redundant reserves into
For comparison purposes, Figure
earnings, thereby compensating for
10 also includes accident year loss
historically low investment yields, as
development for all lines of business
well as elevated catastrophe losses.
(shown by the orange line).

8
JLT Re Viewpoint report: Enough in Reserve?, September 2016.
22 Reinsurance market prospective | WEATHERING THE STORM

Figure 10: Calendar Year Reserve Development by Quarter for Top 30 Global P&C Carriers Versus Accident Year Reserve Experience
– 1998 to Q2 2017 (Source: JLT Re)

7%
140%
6%
Strengthening phase
5% 130%

4%
120%
3%

2% Overreaction phase
110%
1%

0% 100%

-1%
90%
-2%

Danger phase
-3%
80%
New danger phase?
-4%
Windfall phase!
-5% 70%
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Average quarterly calendar year reserve movements as % of equity (LHS) Accident year loss experience, all lines (RHS)

FUTURE VISION
The reaction of traditional carriers and capital markets to future reserve development and loss experience will be important
in shaping the reinsurance market in 2018 and beyond. With speculation already focused on key renewals dates in 2018,
it is crucially important for reinsurance buyers to have detailed insights into key market drivers. JLT Re exists to provide
market-leading analysis and best-in-class advice and risk transfer to support clients in managing market change. We look
forward to doing just that in the weeks and months ahead.
 www.jltre.com 23

WE SEE
OPPORTUNITIES
THAT OTHERS DON’T
At JLT Re, our deep specialist knowledge and
extensive experience of both the reinsurance
market and our clients’ own industries and
sectors enables us to ask smarter questions,
innovate and deliver better results.
CONTACTS
David Flandro Keith Harrison
Global Head of Analytics Chief Executive Officer UK & Europe
London London
+44 (0)20 7466 1311 +44 (0)20 7886 5306
david.flandro@jltre.com keith.harrison@jltre.com

Julian Alovisi Bradley Maltese

Head of Research and Publications Deputy Chief Excutive Officer UK & Europe
London London
+44 (0)20 7558 3376 +44 (0)20 7466 5253
julian.alovisi@jltre.com bradley.maltese@jltre.com

Helen Ferris Ed Hochberg

Head of Communications and Marketing Chief Executive Officer North America
London Philadelphia
+44 (0)20 7558 3388 +1 215 309 4520
helen.ferris@jltre.com ed.hochberg@jltre.com

UK & Europe • North America • Asia Pacific • Middle East • Africa www.jltre.com

This publication is for the benefit of clients and prospective clients of JLT Re. It is intended only to highlight general issues that may
be of interest in relation to the subject matter and does not necessarily deal with every important topic nor cover every aspect of the
topics with which it deals. The information and opinions contained in this publication may change without notice at any time. If you
intend to take any action or make any decision on the basis of the content of this publication, you should first seek specific professional
advice and verify its content.

JLT Re specifically disclaims any express or implied warranty, including but not limited to implied warranties of satisfactory quality or
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clients by JLT Re may be through one or more of JLT’s regulated businesses.

© 2016 JLT Re is a trading name of JLT Reinsurance Brokers Limited. Lloyd’s Broker. Authorised and regulated by the Financial
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