Higher interest rates have lowered the value of insurers' bond portfolios while claims inflation is pressuring reserves, which could lead insurers to seek more reinsurance at the 1 January renewals. Laurent Montador, deputy chief executive of Arundo Re, says sector capacity has fallen slightly since late summer but remains sufficient to keep pricing competitive. He warns that two relatively benign catastrophe years should not be seen as the norm and that past data alone cannot capture changing risks. In Europe, social inflation is raising claims, with some motor insurers facing third-party liability losses above €100 million. Montador also says sidecars and insurance-linked securities are permanent market features, with their value lying in combining reinsurers' expertise with third-party capital.
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