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Things Go Slowly, Then They Go Quickly

Tim Wright

Board Director, Archipelago

Tim Wright serves as a Board Director for Archipelago, and a non-Executive Director and Strategic Advisor for insurance-related ventures. Tim was previously Head of Corporate Risk & Broking, and COO for Willis Towers Watson.

A generation of brokers and underwriters grew up in a 'perma-soft' rating environment. Both traditional and non-traditional capital abounded, such that the capital-pricing 'cycle' that had long characterised the insurance and reinsurance markets appeared to be over. 

That started to change in 2019, accelerated with the 01/01 renewals and has been compounded by the disruption and anticipated losses from the COVID-19 crisis. If high-quality risks have seen unprecedented rate increases, hard-to-place risks have become near uninsurable. The industry's response has been 'mixed', to say the least. A period of consolidation among both intermediaries and carriers has limited the options available to clients. Even more striking has been limited bandwidth of underwriters in lock-down and the loss of specialist placement skills among brokers. 

Perhaps the most lasting impact of the current capacity 'crunch' will be the changes in the way of working. The first part of this will be a return to the basics of more finely-tuned pricing by underwriters and more creative placement solutions by brokers. The second will be a step-change in the capture and use of data, and the embracing of modern ways of working - digital and increasingly remote. Existing players that fail to do both, as soon as the coming 2021 renewals, will be displaced by more adaptable rivals and new entrants. With fundamental market changes, things go slowly and then they go quickly. The market is now moving quickly.

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"Perhaps the most lasting impact of the current capacity 'crunch' will be the changes in the way of working... a step-change in the capture and use of data, and the embracing of modern ways of working - digital and increasingly remote."

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