Gordon McKean, MD, and founder Oak Tree Intermediaries
Can you believe that 2021 is basically over? It never ceases to amaze me at how quickly the years go by, especially the older we get! 2021 was one hell of a year!
It was most definitely one where things were tough and just became tougher as the year progressed. The landscape has changed dramatically in the last 2 or 3 years, with the Covid pandemic not really helping matters. Reinsurers have taken a beating, and that has brought about an Underwriter’s Market, as the Reinsurers are dictating the rules of engagement and there is little sign of it easing up anytime soon. In fact, I believe that we are in for pretty much the same for the next 24 months (or more).
Now that Oak Tree Intermediaries is heading into its twelfth year, as I reflect on how the market has changed over the last decade, one thing I can say, is that we do seem to have less fun in our day-to-day jobs. I recall the days, just a few years ago, where I was able to play golf at least a couple of times a month or more, and nowadays, I think I’m lucky to make 5 games in a year! Maybe it is time for a New Year’s Resolution?!
I think the one thing Covid has done, is that it has made less of our time our own. We are always online – whether on a laptop in front of the TV at home in the evening, and if not, then via the ever-annoying cell phone! I know technology gave us the convenience of accessing anything anywhere, but I think as human beings we battle to switch off a lot of the time.
I think the role of the Reinsurance Broker has changed too. We are a lot more hands-on nowadays than we ever were. Whether it’s quarterly accounting, Reinsurance Quarterly meetings with Treaty Clients and Reinsurers, or placing Facultative risks, we are on the go now more than we ever were, and then add in the analytics side of our business – we basically now do it all! And as if that doesn’t occupy most of our time, we need to constantly find avenues for new business streams, networking with clients, and keeping those good old relationships buoyant, and then constantly strive for operational excellence!
Back to 2021 – the year that nearly was … what a year! The whole Covid pandemic made travel tough for us, so we can’t wait for travel restrictions to ease again, as we aim to grow our footprint on the continent, and get out there again! There is fruit ripe for the picking and relationships ripe for the rekindling.
As for the year that was – we took an absolute pounding on the Life side of our business. A lot of it came down to the rates increasing so drastically that some clients just couldn’t come up with the money to afford the rates the Reinsurers were asking for. We do see things easing a little going forward, however, it is so hard to predict with this pandemic wreaking havoc.
As I write this, I saw on the News today that Austria has shut down (again) due to the virus, and other European countries are following suit. It is a concern particularly given that most of them have a large portion of the population that have had their vaccines. Why I mention this, is because it just goes to show the unknown element of the Virus, and makes it difficult to plot. We’ve all heard of the increasing likelihood of a 4th wave in December 2021 and I think there are a lot of sceptics out there who wonder if it will materialise, but I guess what is more appealing to me as a player in the risk space, is what the mortality rates will look like should the next wave materialise! The outcome of this will determine what the Reinsurance landscape looks like next year, and how long the “Underwriters Market” stays in place.
I think now more than ever – whether Life or Short-term – the time for having a Good Reinsurance Broker who adds value is of paramount importance, and if you are looking for one – I might know one J
Happy 2022 and keep your chins up!