Willis Re solicita extensão de renovação de resseguros devido ao coronavírus

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Willis Re has written to reinsurers asking them to rapidly approve requests from renewing cedants suffering from disruption owing
to coronavirus for two-month extensions on existing terms, Insurance Insider understands.
In an email sent late Tuesday obtained by this publication, Willis Re CEO James Kent stressed the importance of reinsurers acting to ensure continuity
of cover for clients amidst the dislocation caused by Covid-19, which has now infected over 240,000 people globally.
Kent requested that "if required by a client an automatic 60-day extension of reinsurance treaties at current terms shall be allowed for i.e. pro rata as
to time", further stating that “the expectation is this request will be the exception rather than the norm”.
He asked the reinsurer CEOs who were sent the note to grant "early agreement" to a protocol to allow the approach to be cascaded to clients
worldwide should it prove necessary.
The Willis Re CEO also requested that markets where "wet signatures" are currently required waive this in favour of digital signing, with this approach
likely to be adopted everywhere.
To date, reinsurance renewals seem to be proceeding on a somewhat delayed basis, but with an expectation that cover will be fully in place for 1
April.
Reinsurers and brokers have switched to working from home, and business is being bound over email.
Sources have suggested that reinsurers are unlikely to agree to automatically extend, with requests set to be treated on a case-by-case basis. In certain
markets, like Japan, where substantial rate increases are expected, reinsurers have a significant disincentive to agree to extend.
As reported earlier this week, rate rises on Japanese wind are in a 35-55 percent band following brutal typhoon losses.
In some instances, treaties do include provisions that allow clients to unilaterally extend the cover for a number of months.
To date, Aon and Guy Carpenter are not believed to have issued similar requests to reinsurers as Willis Re, potentially pointing to a wide range of
views around the degree of disruption likely from coronavirus.
Although reinsurers, brokers and cedants may have transitioned successfully in the most part to home-working, it remains to be seen how resilient
they will be to potential scenarios where a high proportion of the workforce is ill concurrently.
Kent's comments come as the reinsurance market – like the broader insurance sector – works to assess the likely impact of coronavirus on the asset
and liability sides of the balance sheet, as well as the impact on future demand and claims activity resulting from the predicted recession.
Reinsurers, like other carriers, will see a balance sheet impact from losses to equity portfolios and credit impairments, and also have exposure to
losses stemming from lines including contingency, trade credit and D&O.
Willis Re declined to comment.
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