Ryan Specialty Group founder Pat Ryan says Berkshire Hathaway’s deal for the Aon Lloyd’s business and move into the excess and surplus lines market, coupled with increased convergence between reinsurance and capital markets, mean this year has so far been one of the most eventful in his career.
The increased convergence between insurance, reinsurance and the capital markets and the increasingly aggressive moves from Warren Buffett’s Berkshire Hathaway mean this year so far has been one of the most eventful in a long time, according to Pat Ryan, chairman and CEO of Ryan Specialty Group and founder of Aon. Ryan also predicts more reinsurers will follow Berkshire Hathaway into the commercial insurance market.
“I’m ready to look at the first four months of 2013 as being some of the biggest changes in my lifetime,” Ryan told delegates at Reactions’ Inaugural Midwest Re/Insurance Conference in Chicago on April 30.
The first reason for this, said Ryan, is that the convergence of capital markets, reinsurance and primary insurance is accelerating at a time when the reinsurance industry boasts record capacity.
“At the beginning of 2013 we had over $500bn of reinsurance capital that many people are saying is not being put to good work,” said Ryan. “While we are all pondering that, the capital markets products and insurance entities are coming in and saying: ‘You don’t have to buy traditional reinsurance, we can solve those problems for you with capital market solutions.’
“Now the buzz word is convergence. We’ve got capital markets, we’ve got reinsurance, we’ve got retail – they’re all converging together. What does that mean? Is that a good thing? Is it a bad thing? Is there an opportunity there? What’s going to happen? Will it create a hard market? No! It will in fact put pressure on the market because there are new entities and they’ve got to get in there and be in business.”
Another reason Ryan believes this year has produced some of the biggest changes in his lifetime is … click here to continue reading