Touching on what he took away from the recently concluded Rendez-Vous de Septembre in Monte Carlo, MNK Group’s CEO, Manoj Kumar, confirmed a shift in the industry from pricing to nuanced underwriting, which includes adjusting terms and conditions and playing with deductible levels, ushering in a new era of finetuning rather than dramatic market swings.

Describing the Rendez-Vous de Septembre in Monte Carlo to Asia Insurance Review, Manoj Kumar called it “the event that sets the trend and mood for the new year”.

This year, Mr Kumar noted that, for the first time in a long while, there was a notable absence of debate on whether the market would be soft or hard. Rather, he said there seemed to be an emerging consensus that “the market would continue to be soft.

“There was an element of surprise last year as to what would 2025 bring, which eventually was very soft,” he said.

“As for 2026, the expectation is that the market will remain soft. While it is unlikely to deteriorate further, it is also not poised to recover to 2024 levels. Even factoring in another hurricane in this season, prices are not expected to return to earlier levels.”

What is next?

According to Mr Kumar, to compensate for the soft conditions, a new area of focus is how terms and conditions (T&C) can be finetuned.

“Instead of asking for a higher premium, which may or may not be possible depending on available capacity, reinsurers and managing general agents (MGAs) are looking at increasing things like deductible levels, like attachment points, and finetuning other conditions,” he said, calling these strategies ‘nuanced underwriting’.

Noting the profits made in 2024, Mr Kumar also said surplus capital was being reinvested. In turn, this has led to increased risk retention and reduced demand as a result.

Casualty

Speaking about casualty, Mr Kumar pointed out that previously, “casualty was seen as a whole, like one class of business”.

“Now the trend is shifting towards casualty bifurcation due to social inflation and litigation trends,” he said.

“Low-to-moderate hazard accounts typically enjoy stable or modest rate increases while high-hazard or heavily litigated accounts are facing steep rate hikes, reduced limits, tighter underwriting and more exclusions.”

He gave heavy vehicles or motor fleets, product liability, utilities and healthcare as examples of the latter.

Reinsurance in APAC

Touching on APAC, Mr Kumar said growth markets in the region, such as Vietnam, Indonesia and the Philippines have “a lot of things” happening, from announcements of an upcoming bullet train project, giant sea wall and upcoming transportation infrastructure, thus pushing demand for direct insurance.

He also made sure to highlight that Japan is gaining stability and Malaysia’s market is “not too different from the rest of the world”.

“Thanks to some good years in the region, companies have increased retention and prices are static,” he said, pointing out that in Japan and Australia, there is no shortage of capacity.

Climate change

Although Mr Kumar noted that many have been talking about climate change for a very long time, “progress has been limited, though the industry recognises the need to gear up” and has started to take a cautious approach to new products.

“It will be a long tail, but climate related products will be game changers,” he said.

Cyber

Calling cyber an “inherent risk” because it is usually not known where the risks and claims may come from, Mr Kumar’s view is that the reinsurance industry may be becoming more innovative, due to the creativity of cyber criminals.

“People have moved away from off-the-shelf products and are being more proactive in risk management,” he said, noting that the industry has adapted and is managing cyber risks better with modern technology.

Rise of MGAs

“Another thing discussed at Monte Carlo was the sharp increase in the number of MGAs,” he said. He also observed that many did not think MGAs would gain the kind of prominence they now have.

“But over the last two years, many MGAs have emerged, and there are many reinsurers that want to work with them,” he said.

But he also noted challenges that come with this, saying too many MGAs may lead to a lack of discipline.

“While some MGAs can be quite large with their own modelling, aggregation management and underwriting, others may only have two people with not much control of basic underwriting,” he said.

“If there is no end-to-end risk management, which starts from modelling and pricing, and subsequently risk management that includes aggregation and exposure management, it could backfire.”

Said Mr Kumar, “MGAs have to be very agile and look for ways and means where they do not just work as an additional capacity provider.”

Alternative and traditional capital

Speaking on alternative capital, Mr Kumar pointed out that while it has grown, “traditional capital has not gone away”.

Rather, he said traditional capital will continue to do what it is doing, saying “alternative funds will coexist with traditional ones.”

“It will depend on access, jurisdiction, regulations, rating agencies and what is accepted,” he said.

“People have moved away from off-the-shelf products and are being more proactive in risk management”