Dear friend,
If the convergence community was fed up with being talked about at the Monte Carlo Rendez-Vous, the annual Trading Risk roundtable was its chance to be heard.
Once again the rise of the alternative reinsurance market was among the hot topics for debate at the Café de Paris in another quiet year for catastrophe activity and with little appetite for talking about how far rates might drop at 1 January.
Indeed, one leading broker suggested that the 'alternative' market was no longer an appropriate moniker for convergence capital given its integral role within the property catastrophe market.
But if anything the market's success over the past year seemed to have provoked more defensive attacks from some traditional markets worried about losing market share.
This year Munich Re provided grist for the mill when it critiqued pricing practice on the cat bond market at its Rendez-Vous press conference, while Lloyd's chairman John Nelson also aired concerns about market surveillance.
There was clearly some frustration around the table at some of the more repetitive charges laid against alternative capital - as one participant pointed out, many of whom are answering to the same investors that might hold reinsurance equity.
But the great thing about bringing together market luminaries from within the convergence space is that the community has a chance to move past this rhetoric and tackle the issues that matter to it, such as finding new areas for growth.
Indeed, the reinsurance buyer at the table - James Slaughter from Liberty Mutual - introduced a curve ball into discussions about ILS pricing when he suggested that capital markets reinsurance was still far from cheap enough.
His challenge to the market was to create interest in truly high-layer US catastrophe risk at premiums in the order of 3 percent.
As another participant pointed out, this would require extra leverage to work for investors.
But in a rapidly evolving reinsurance market, left-field ideas might be just what is needed.
Enjoy the read,
Fiona Robertson
Editor,
Trading Risk
To view the roundtable, click here