The increasing ease of raising intelligent capital could lead to the end of the established insurance cycle according to Toby Esser, Group CEO of Cooper Gay Swett & Crawford, speaking at the BrokersLink Global Conference in Singapore.
He told delegates that in the future the market should only expect to see country specific short-term rate hardening following catastrophes, as previously experienced in Chile, Japan and Thailand, rather than cyclical changes to the overall market.
Esser said: “There is no naive capacity in the market. Hedge funds, pension funds, endowments and trusts are looking for investment returns, but this moveable capital could lead to short term geographically-focused rate changes in the future that consign the accepted wisdom of the market cycle to the past.”
He also pointed out that emerging economies will create enormous new markets for the insurance industry. “While the in-flow of new capital could bring cycle uncertainty, we will need the additional capacity in the future to support the increasing insurance hunger of emerging markets such as India, China and Latin America.
“It is CGSC’s intention to become a major player within these markets by making a series of strategic acquisitions over the coming months,” Esser continued. “By strengthening our presence in Asia and Latin America we believe we can further improve our competitiveness and secure business within the higher margin markets specialist sectors.”
A further eleven speakers shared their thoughts and experiences on the second day of the conference. They topics covered including economic opportunities and challenges in Asia, the insurance industry’s role in driving corporate social responsibility, the latest risk management trends and the future of insuring unique risks. The Ambassador for Angola in Singapore also spoke about his perspectives on Africa.