RAA highlights growth opportunities at PCI
Reinsurers will seek opportunities for growth
in the current market as rates potentially
harden, according to Frank Nutter, president of
the Reinsurance Association of America (RAA).
“The primary interest of the reinsurance
community is looking for growth opportunities.
This could mean working with the PCI to find ways
to transfer risks from government programmes
into the private sector,” Nutter told PCI Today.
He added that the National Flood Insurance
Program is a good example of this potential.
Other government bodies that could have similar
potential to do this include the Export-Import
Bank of the US, the Overseas Private Investment
Corporation, and Fanny Mae and Freddie
Mac, which take secondary mortgage market
risk (although the latter have increasingly been
transferring risk to reinsurers in recent years).
“When we look at the purpose of advocacy
groups such as the RAA and the PCI,
one thing we can do is help provide
the industry with opportunities
to underwrite risks that perhaps
government has taken on and is
looking for ways to partner with
the private sector,” said Nutter. “I’d
highlight that as the top priority.”
According to Nutter, tax
reform in the US is another big
issue for the RAA.
“We, together with the PCI, will be working
on the industry’s agenda related to tax reform,
which will be another one of those things that
should encourage economic activity that will
benefit the insurance industry,” he said.
Nutter also stressed that 2017 will be an
extraordinary year for catastrophes, with maybe
$100 billion in insured losses from recent
hurricanes just in the third quarter,
coming on top of $22 billion of
insured losses that occurred before
the third quarter.
The industry can use this as
an opportunity to demonstrate its
worth to policymakers, he said.
“For those of us who deal with
government it’s really more about
making sure that government
doesn’t offer any restrictions about
how the industry can adjust these claims and
allow people to rebuild,” he said.
“In the past we’ve sometimes seen governments
seeking to impose restrictions on the industry or
the imposition of catastrophe bonds or similar.
From my perspective it looks as though the
industry is doing a good job of stepping up, paying
claims and getting adjusters in.” n