Already 2013 has the air of being a transformative year for the industry. Over the past 12 months the usage of non-traditional sources of capital has arguably reached a tipping point that shifts the reinsurance business model possibly forever and not just in response to the low interest rate world we presently live in. Equally the quota share sidecar deal struck in March between Aon and Berkshire Hathaway looks set to soon be repeated in a fashion by Willis, perhaps redefining how specialist insurance products are underwritten and distributed; certainly in the current soft market but potentially across the longer term trading cycle.
And now by reportedly axing 30 percent of his senior corporate roles and targeting savings of $20 million per annum at Endurance, their newly appointed high profile CEO John Charman might just be signalling the onset of a wider appraisal of the entire market’s operating cost structure. As reported by Insurance Insider, Charman views the infrastructure he has inherited at Endurance as unsustainable but not untypical of an industry characterised by, in his words, bloated expense ratios.
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