5 Questions with Alexander Roth, Managing Director, Head of Capital & Operational Solutions Europe, Howden Re

As insurers operate in the next phase of the market cycle, which Howden Re is defining as “a hard market, softening,” capital and operational solutions have become critical strategic levers for achieving capital efficiency and building long-term resilience. Alexander Roth, Managing Director, Head of Capital & Operational Solutions Europe, shares his perspective on how client priorities are shifting, what themes will dominate upcoming industry discussions, and the forces likely to shape decision-making in the months ahead.

Looking back over the past year, what have been the most notable developments or shifts for your specialty in the market?

Over the past twelve months, we have successfully built a strong team of former underwriters, capital modellers, actuaries and asset managers. Through our multi-strategy and multi-disciplinary approach, we are committed to supporting our clients in addressing the most complex capital and operational challenges. We take pride in what we have built and achieved over this period.

In this market, we see clients now prioritising strategic, long-term partnerships over transactional solutions, expecting tailored advice aligned with their strategy and capital priorities. This has made asset–liability matching, capital efficiency, and customised structured solutions C-suite priorities as insurers prepare for softer market conditions.

What differentiates Howden Re is that we do not approach this new dynamic market environment through a single product lens. We frame solutions against financial targets, dividend protection, and capital optimisation. Our Capital & Operational Solutions practice works holistically with clients, combining structured reinsurance, market risk advisory, and operational efficiency strategies. The aim is not to “sell” a solution, but to align with a client’s strategy and co-develop a tailored framework that helps them meet financial targets as well as mid- and long-term strategic objectives.

What themes or topics do you expect to dominate discussions at upcoming industry conferences?

Pricing trends will always form part of the backdrop at industry gatherings. That said, inflation and interest rate dynamics remain front of mind, with close attention on central bank policy and the risks of loosening too early. The industry is mindful that cutting rates too early could reignite inflation, creating renewed strain on underwriting results and reserves.

For our practice, the more relevant themes are less about headline pricing and more about the tools insurers can use to manage capital and earnings volatility in this environment. Asset-liability matching, balance sheet efficiency, and the strategic use of capital solutions resonate most with clients and will continue to shape discussions at Baden-Baden, APCIA, and beyond. Insurers want to understand how to optimise across both the asset and liability sides simultaneously, using capital and operational solutions to manage volatility, protect against downside risk, and unlock capital for growth or shareholder distributions. These discussions are more strategic in nature and less about near-term pricing cycles.

What shifts are you seeing in client priorities, expectations, and behaviours?

As I have mentioned, the most notable shift we see is that clients increasingly value strategic, long-term advisory relationships over transactional, product-led solutions. They do not want to be presented with one-size-fits-all structures. Instead, they expect partners to invest the time to understand their strategy, capital position, and shareholder priorities, and then co-develop tailored solutions.

This expectation reflects a broader change in how insurers think about their balance sheets, earnings protection, and capital efficiency. Historically, the focus was on the liability side. In recent years, however, the asset side has become more dominant, yet it remains under-appreciated and significantly more volatile in the P&C industry. Asset–liability matching and capital efficiency have become essential, while operational efficiency, particularly in claims and expense management, is now a priority to offset softening conditions.

These dynamics have elevated discussions from a technical exercise to a C-suite and board-level priority. Executives now want to talk about delivering return targets, protecting dividends, meeting investor expectations, and optimising capital efficiency ahead of a softer market. The broader application of structured solutions is a key part of this shift: retrospective and legacy solutions, once used mainly for operational objectives in Europe, are now widely applied to strategic capital management and earnings protection. Prospective solutions are being increasingly customised to meet cedents’ risk management goals, financial targets, and evolving regulatory and reporting requirements.

Our approach at Howden Re has been well received because it matches this new reality. By offering a single team with a holistic view across assets, liabilities, and operational efficiency, we provide a 360-degree view that builds trust and reinforces our positioning as a long-term partner aligned with their strategy.

In your view, what factors are likely to shape deal activity or strategic decision-making over the next 6–12 months?

The most significant factor will be pressure on financial returns as underwriting margins tighten. Inflation and reserve volatility are already creating opportunities in the retrospective and legacy space, as insurers seek to stabilise results and safeguard distributions. We also expect more traditional reinsurers to turn to the retrospective structured market to provide capital relief and earnings protection cover. Expanding market capacity in this area has been a key focus for Howden Re in the past 12 months.

At the same time, we are witnessing a meaningful shift toward non-traditional capital. Catastrophe bonds and ILS placements, once used mainly by the largest global carriers, are now being adopted by more conservative European insurers, which is an encouraging development. This trend is likely to accelerate as companies look to diversify their capital base and strengthen resilience.

Operational efficiency will also continue to shape decision-making. With expenses and claims costs under scrutiny, many insurers are turning to efficiency measures as a critical counterbalance. Taken together, these dynamics point to a more strategic approach to capital and operational solutions, where companies are not only addressing near-term challenges but also positioning themselves to deliver consistent performance for shareholders over the long term.

How will capital and operational solutions continue to evolve to meet insurers’ needs?

Our practice is not tied to the reinsurance renewal cycle in the same way traditional treaty placements are, and that distinction is important for stakeholders to keep in mind. The tools we use - structured reinsurance, operational optimisation, and asset side strategies - are levers that can be pulled year-round, rather than confined to a seasonal window. This allows insurers to manage financial performance dynamically, balancing underwriting, investment, and operational outcomes throughout the year. That flexibility is critical for companies navigating a softening market while continuing to meet shareholder expectations.

Looking specifically at 1.1, structured reinsurance demand remains stable and continues to be an important tool in providing solvency relief and managing earnings volatility for its clients. A key challenge in today’s market is how cedents manage elevated natural catastrophe retentions. Structured solutions offer a way to gradually introduce protection, mitigating volatility over time and complementing traditional reinsurance covers.

As stated in Howden Re’s report “Who dares wins - Innovation in an era of hard market softening”, managing emerging risks calls for targeted solutions that address protection gaps and heightened exposures. At Howden Re, we have made it a priority to advance such solutions, with aggregate covers and concentration management as key examples that strengthen portfolio resilience and mitigate loss volatility.