French risk managers warned to prepare for further hardening and start renewals early

French risk managers need to prepare their coming renewals well in advance and be ready to share more information with insurers than perhaps they have in the past because the insurance market will toughen further as the year progresses, advised François-Xavier d’Huart, country manager for France at Berkshire Hathaway Specialty Insurance (BHSI). As AMRAE gathered for its annual conference this week, Mr d’Huart, who launched BHSI’s France operation in June last year after joining from AXA XL, told Commercial Risk Europe that the French market had hardened during year-end renewals in many lines of business, notably D&O and property. But the hardening was patchy in France with some lines, such as general liability, only mildly affected at year-end, he added. Risk and insurance managers are advised not to take a breather and expect the market to calm down in 2020, because Mr d’Huart and many others in the market, including AMRAE president Brigitte Bouquot, expect conditions to toughen further as the year progresses. BHSI said it will capitalise on the uncertainty and sometimes irrational behaviour of some insurers to build on its healthy start and extend beyond its initial property, casualty, environmental and construction offering into new lines this year. New areas of focus will soon include executive and professional risks and, potentially, marine cargo, to provide further support to industrial customers, said Mr d’Huart. “We believe that the French market is currently presenting lots of opportunities as it is hardening in many lines of business such as D&O and property. In this context, the value proposition of BHSI is particularly relevant. We build long-term relationships with customers through regular discussions, which help us to have a good understanding of the risk and offer sustainable pricing along the years,” he told CRE. BHSI’s long-term proposition is also supported by the group’s exceptionally strong capital position as part of Berkshire Hathaway group. This enables the insurer to operate without relying on reinsurance, thus underwriting on a net basis. The group’s sharp focus on claims – the second person hired for the French operation was claims manager Katell Pouliquen – is also a big help in a toughening market, said Mr d’Huart. “We started to underwrite in late 2019 and bound our first accounts on 1 January. We are clearly in a hardening market, with increasing rates in most lines of business – especially property and D&O – and reducing capacity. The reaction from our competitors is globally requested, but often quite irrational in the way it is applied. This is where we see the opportunity as we work very hard on understanding each and every risk and putting the right price in front of them,” he added. And it seems as if the market hardening will continue and spread to other lines. Mr d’Huart therefore urged insurance buyers to prepare early and share more information with insurers to help their case. “We believe the market is continuing to harden actually, and many of our competitors spread the message on the market that rate increases obtained during the January 2020 renewal are not enough. In addition to that, some lines of business, such as general liability, have not yet seen large rate increases and we believe it may happen later this year or on 1 January 2021. We would advise customers to prepare their renewals well in advance and share more information with insurers, as there is still a gap between the level of information we can get on the French market and what we would have, for example, in the US market,” he said. BHSI has grown impressively since its launch back in 2013, mainly in North America and the Asia-Pacific. Progress in Europe was initially slower but since the arrival of Chris Colahan, former head of the Asia-Pacific business, as head of the UK and European operation in June 2018, the pace has picked up. In Europe, BHSI trades under Berkshire Hathaway European Insurance DAC. The initial operations based in the UK and Germany are now complemented by operations in Spain and France. The French market is a natural fit for BHSI because of the relatively high number of multinational companies that need the specialist and global support it offers, said Mr d’Huart. “France is a great opportunity for BHSI as it is a large P&C commercial lines market – with €20bn of premium in total – and there is a pretty large number of large corporate and mid-size companies having international activities, which is the core business for BHSI. This is a mature market that is hardening at the moment in many different lines of business, so we believe it is the right time for us to enter this market and offer new capacity and a new value proposition, which is actually quite different from the one currently offered by our competitors in the market,” he explained. “We are long-term focused and we believe that we can, during the next few years, build strong relationships with French customers as our offer would meet their needs in terms of capacity, claims expertise or international support. As we are very much customer focused, we believe that our offices and teams should be as close as possible to our customers to support them in the best way, and this is the reason we decided to set up an office in Paris,” added Mr d’Huart.

French risk managers warned to prepare for further hardening and start renewals early

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