This was the opening panel session of Prospectus 2021, a new annual reinsurance and insurance-linked securities (ILS) conference brought to you by Artemis in collaboration with sister title Reinsurance News, in association with Kroll Bond Rating Agency (KBRA), panellists discussed the Covid-19 outlook for the re/insurance and ILS industry. 

To start, Peter Giacone, Managing Director, Global Head of Insurance, KBRA, noted the very unique situation that the markets are in many months after the arrival of the global crisis. 

“I think back to how we were looking at it and trying to grapple with the issues back in March and April. I think now, with the benefit of six months of hindsight, I think the industry has actually fared quite well. From a credit risk perspective, I think there was an awful lot of hand wringing that was going on at the time, there was a lot of concern around how assets and liabilities would behave,” said Giacone. 

At KBRA, he continued, the firm tried to keep a very steady hand with regards to taking rating actions, which Giacone said has proven to be the correct course of action. 

“I think the asset side of the balance sheet has sort of stabilised a little, obviously with quite a bit of volatility and uncertainty continuing. So, some of the short-term concern on that front, I think, has somewhat subsided, but we will obviously have new challenges, in terms of low interest rates,” he said. 

Adding, “On the liability side, I think also, again, lots of uncertainty. But, some of the very large numbers that had been bantered around initially, which I think made sense at the time, certainly I think we’re at a point now where perhaps some of those are not where we’re going to land. And, so, I think that’s good news for the industry overall.” 

The panel discussion also features David Flandro of HX, Linda Johnson of TigerRisk Partners and Joanna Syroka of Fermat Capital Management.