Swiss Re’s Lohbeck: Cyber, credit and construction lead specialty reinsurance opportunities

Cyber, credit and surety, and engineering and construction are the three areas driving specialty reinsurance demand in 2024, according to Swiss Re’s Anne Lohbeck.

Lohbeck, who serves as the reinsurer’s CUO for specialty, said these lines will likely continue to present the biggest specialty reinsurance opportunities over the next five years.

In cyber, she said Swiss Re is “investing very actively” to further build out its offering.

“Cyber is a market with a very large protection gap. We see a number of regions, predominantly in Asia, that are now really taking off in terms of the need to protect against cyber risks,” Lohbeck said.

“It is the single line of business in the specialty space that has the best data transparency, where we have the most insight from a reinsurance perspective on what the underlying coverages are and the underlying risks are,” she continued.

However, she cautioned that it was “just a question of time” before a major event did impact the market.

The CrowdStrike outage highlighted the interconnectivity of cyber exposures and the potential for accumulation, Lohbeck said.

On credit and surety, Lohbeck said it serves as a stabiliser and facilitator of global trade, including through products such as political risk insurance.

She said Swiss Re was continuing to closely monitor developments around strikes, riots and civil commotion and had been working to provide contract certainty for its clients.

“We are making sure we gather adequate information around the risks we are covering, and monitoring our aggregates closely,” she said.

For engineering and construction, Lohbeck said one of the major drivers of demand was investment related to the energy transition.

“That continues to fuel new exposures and fuel the demand for insurance and reinsurance,” she said.

Lohbeck said risk profiles and exposures were evolving in the space, particularly for new technology, which requires constant investment in wordings, clauses, coverage conditions and claims tracking.

“As an industry, the biggest challenge that we have around this is to attract enough underwriting technical talent so that we're together able to cover these risks and assess them in the way that they deserve.

“That can play a really significant role in making that transition both insurable and economically feasible.”