Sebastian Cook discusses matching capital with client needs on The Reinsurance Podcast

“If you have excess capital, that is fantastic. And if you have client problems to solve, even better. But the skill is in matching the two.”

Sebastian Cook, UK CEO and Deputy CEO, Howden Re International, joined Ben Rose on Supercede’s The Reinsurance Podcast in Monte Carlo to discuss what changing market conditions mean for buyers, brokers and reinsurers.

Reinsurers are delivering strong results and capital is abundant. Clients, meanwhile, are facing greater volatility and uncertainty. Sebastian described the market as “beautifully poised”, with an opportunity to put that capital to work against the risks and challenges clients need to address.

Look beyond price

Competition is increasing as the cycle moves on. Price matters, but Sebastian argues that it is only one component of value.

“We're spending much more time with our clients establishing: what is the value creation they must achieve?” Sebastian said.

Those conversations increasingly cover the whole programme. Attachment levels can help address earnings volatility while structural changes can provide more capital relief. Other discussions focus on individual perils and risk types that aren't always dealt with effectively through the core programme.

For Howden Re, the focus is on protecting that strategic core while exploring the wider range of options now available.

“From a client perspective, our focus is: look after the strategic core, but also explore some of these incredible tactical options you have now that reinsurers are offering you a broader suite of products,” Sebastian said.

That includes structured and parametric solutions, as well as a growing range of capital options.

The broker’s role is changing

The breadth of those conversations has changed what clients need from their brokers too.

“When I first started coming to Monte Carlo, the things you were talking about as a reinsurance broker were, you know, price of programme,” Sebastian said.

Today, Sebastian says buyers, brokers and reinsurers are discussing a much wider set of questions, from growth and risk transfer to off-balance-sheet capital and returns.

That requires a broader mix of expertise. Howden Re brings together broking, investment banking, analytics and increasingly data science as solutions once associated with a narrower part of the market become more widely relevant.

Sebastian also discusses how reinsurers can increase their relevance as competition grows and takes a measured view of artificial intelligence (AI), where Howden Re is already seeing practical benefits in specific areas.

“We have found ways in small areas to make a significant difference using AI. Finding sort of industrial ways to fundamentally change a proposition, we're not there yet,” Sebastian said.

Watch the full episode of The Reinsurance Podcast to hear Sebastian discuss the changing role of the broker, the wider range of options available to clients and where AI is starting to make a practical difference.