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Dirk Spenner, CEO of Gallagher Re International, said one of the key themes reinsurers will be focusing on at this year’s Baden-Baden is how they can stay relevant to clients, and this includes offering frequency protection and aggregate covers, but in a very well-structured and calculated manner.
In an interview with Reinsurance News ahead of the annual Baden-Baden Reinsurance Meeting, Spenner explained that reinsurers do not just want to have conversations about price, but also about how they can stay relevant and support clients.
“What we’re seeing at the moment is a market that’s softening from a position of strength, and that’s the baseline anyone will agree on,” said Spenner. “So, from a client’s perspective, I think one of the key themes in Baden-Baden will be, how can I benefit from that as a client? And from a reinsurer’s perspective, how can they stay relevant to the client?”
He continued, “From a client’s perspective as well, how can we put our relationship on a footing where the client can benefit from the softening trend in the market, and the reinsurer can support them with a build out of commercial and sustainable reinsurance structures, but clearly one that’s beneficial to the client compared to 12 months ago.”
Spenner highlighted that reinsurance broker Gallagher Re is seeing increased demand from cedents and appetite from reinsurers for frequency protection and aggregate covers, but stressed that these need to be structured in a very “well-structured and calculated manner.”
He explained, “What we’re seeing is that people are buying more frequency protections and aggregate XoLs in all shapes and forms, and those protections will pick up exposure that sits in raised retentions, but again, in commercially sustainable structures. That’s clearly a trend that we see.”
Spenner noted that five years ago, many reinsurers were unhappy about some of these structures, which from their perspective were unsustainable.
“We’re not seeing a reemergence of unsustainable structures,” he said. “We’re seeing an emergence of structures that are protecting a very plausible exposure area for clients.
“The world is changing. The property protection landscape isn’t just about ‘I need to protect my peak exposure’, but there’s also a need for protecting smaller medium-sized events that you could suspect have an ongoing frequency of occurrence.”
Spenner also noted that there is currently more supply than demand, most evidently in nat cat.
He said, “Reinsurer capital increased by another 11% in the first half of 2026, and that’s on top of a very substantial increase of reinsurer capital over recent years. We split it between traditionally aligned capital and alternative capital, and both areas are growing. The alternative space is clearly seeing a lot of influx of capital that was previously not deployed, and the traditional marketplace also recorded a lot of retained earnings, which increases the overall available capacity.
“So, the clear answer is there’s an excess of supply versus demand, not equally in all classes, but particularly in nat cat. This is an area where it’s most evident, and pretty much for all areas in the world and all scenarios.”
Regarding alternative capital, Spenner noted that it has become a much more significant part of the risk transfer universe.
He explained, “Traditional capital is still dominating the protection landscape, but alternative capital has become a more significant supporter of the risk transfer business. In the immediate future, how sticky it will be is something we’ll see over the cycle, once we have a more normal loss emergence. But certainly, at the moment, you would think that capital is there to stay in the medium term, and is growing.”
He added, “The emergence of alternative capital just means that the pool and the options that our clients have has just become a lot bigger, and it’s for them to decide where they want to place their business. Some people use alternative capital quite extensively, and others less so. So, you see a variety of decision making here, and that provides great choices for our clients.”
During the interview, Spenner also highlighted that, beyond just price and capacity, what cedents are looking for from their reinsurance partners is a clear understanding of their needs.
“If you look at the key needs that any of our clients have, it’s that there’s a need and a push for growth. Our clients are in a market where their underlying business in most lines of business is softening as well, and what they really want from the reinsurer is an understanding of their business model, understanding of their needs, and a conversation over the reinsurance protections that allow the clients to get the appropriate support from the reinsurers. That’s really key, and that will then logically cement relationships and make sure that they exist in the long term. Our business is cyclical to a point, and it’s important that clients and reinsurers are meeting at this point of the cycle, so they can have a beneficial relationship. That’s really important,” Spenner emphasised.
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[post_title_image]📰 Curated Industry Article This is a summary of a full article from a trusted insurance publication. Click "Read Full Article" below to read the complete story.Dirk Spenner, CEO of Gallagher…
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