September is always an important moment for the global insurance and reinsurance industry, and this year was no exception as we gathered in Monte Carlo for Les Rendez-Vous de Septembre to discuss the trends impacting the market.
This year’s Guernsey in Monte Carlo Champagne Reception, hosted by Guernsey Finance alongside the larger annual conference, was especially significant as we celebrated its 10th anniversary. Over the last decade, the event has grown in tandem with Guernsey’s international (re)insurance offering, providing an opportunity to showcase the expertise, innovation and collaborative approach that have helped establish the island as a leading centre for reinsurance, ILS and captives.
What struck me most this time in Monte Carlo was not simply where Guernsey stands today, but the sense of excitement about the direction in which it is heading.
In my welcome address I reflected on the recent developments signalling growth in the island’s reinsurance sector. The establishment of Zenkyoren Re Ltd. by the world’s largest insurance co-operative organisation, and the execution of the first real-world collateralised reinsurance transaction using tokenisation and smart contracts have both taken place in Guernsey this year; tangible evidence of the confidence in our ability to support sophisticated reinsurance structures.
It was a pleasure to hear Ian Thompson, Chief Executive of Ascot Group, echo that confidence in his keynote address. He remarked that Guernsey was the fourth jurisdiction in which Ascot had launched a subsidiary – as well as Bermuda, the UK and the US – and for Guernsey to feel like such a "natural home" among leading names in the reinsurance world was a credit to the power of our ecosystem.
I couldn’t agree with that statement more. We are competing in a market alongside some of the world's largest and most established insurance centres. Yet organisations continue to choose Guernsey because of the qualities that matter most: expertise, regulatory credibility, commercial agility.
Looking ahead, another important milestone is on the horizon. Guernsey's application for NAIC qualified jurisdiction status has the potential to further broaden our international reach, strengthen connections with the US market and create new opportunities for reinsurers seeking efficient access to global business. For a jurisdiction that has consistently demonstrated its ability to bridge traditional expertise with innovative structures, it represents a new phase in the evolution of our offering.
Yet momentum alone is not enough. As Ian observed during his address, the industry is entering a different phase of the market cycle. Several years of strong performance have attracted significant amounts of capital, which have increased competitive pressures and contributed to softer pricing conditions across many lines of business.
While global reinsurers remain well capitalised and financially strong, market participants are focused on maintaining underwriting discipline in a more competitive environment. Ian is right to caution against complacency.
In 2016, when we first hosted the event in Monte Carlo, it had been 10 years since a hurricane had made landfall in the USA and consequently market pricing had weakened over successive years. What followed from 2017 was a lesson in the forces of nature and the volatility of the insurance market. Three hurricanes, Harvey, Irma and Maria, visited upon mainland America in 2017; wildfires raged, Europe flooded, Japan had typhoons in 2019, and the pandemic arrived in 2020.
Insurance exists to manage uncertainty and provide resilience. The current risk landscape looks ominous with geopolitical instability, and supply chain interruptions and energy price shocks are probable. Climate change is exhibited by a record-strong "super" El Niño which could cause severe global temperature spikes, extreme weather disruptions, and heightened public health and food security crises through early 2027.
In the face of so much uncertainty Guernsey must continue to innovate, developing new approaches to risk transfer and structures that can adapt as rapidly as the risks themselves.
With these trends in mind, the conversations at Monte Carlo this year felt less centred around a need to justify Guernsey’s place in the global reinsurance market through a list of achievements, and more about its steady track towards shaping the international response to complex risks.
