Between the Yacht Club de Monaco and the luxurious Hotel Le Méridien at the eastern end of Monte Carlo, a remarkable market has formed again for a few days since the weekend.

Global demand from insurers from Africa to the United States to Europe and supply from reinsurers from Bermuda to China converge in a strip of approximately two kilometers.

Phillip Krohn

Editor in business, responsible for "People and Business".

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Here they discuss how developments around natural catastrophes and cyber risks should affect prices over the past 12 months.

Unexpectedly high inflation is the dominant theme this year.

No participant who speaks publicly in this setting of confidential conversations in the many marble-floored hotels fails to emphasize how good it is to be able to speak face-to-face again after two failures.

Three years in which the conditions in the industry have changed fundamentally.

During the last Rendez-Vous de Septembre, as the meeting founded in the 1960s is officially called, hopes arose that the expensive insurance year of 2017 could gradually end the apparently eternal period of falling prices.

The negotiating position of the big reinsurers is better

The so-called "hard" market with rising prices has been a reality for several years now (see chart).

And that changes the negotiating positions of the top dogs like Munich Re and Swiss Re vis-à-vis reinsurance brokers who collect a limit on their claims payments for insurers.

"The inflation assumption is a driver for the profitability of our products," says Torsten Jeworrek, Reinsurance Board Member at Munich Re.

If you miscalculate here, you will not be able to avoid bad results in a few years after all the damage that has occurred has been settled.

Different approaches among the major market participants can be read between the lines.

While Hannover Re relies on dialogue with primary insurers, others are tired of the industry's long-standing defensive position towards their customers.

Inflation is dominating the discussions, says Jean-Jacques Henchoz, Swiss CEO of Hannover Re, number three in the world after its competitors from Munich and Zurich.

“We see this as a joint task and not a battle between reinsurers and primary insurers.

We just have to make sure we get prices that are commensurate with the risk,” says Henchoz.

It sounded very different from what Scor from Paris, one of the most important competitors in the concert of the next largest reinsurers, reported in Monte Carlo.

“Prices are driving the market, reinsurers have not achieved an appropriate return on equity for years.

It's about restructuring and reallocating programs," says Jean-Paul Conoscente, Scor's board member responsible for property-casualty reinsurance.

Now, after a decade and a half with a soft market, it is finally time to renegotiate the terms of the insurance contracts.