Discipline remains crucial amid market softening: UIB CEO Barrington

Although the past two years have seen relatively calm catastrophe seasons, they differ in terms of market dynamics, according to UIB CEO Shaun Barrington, speaking at RVS 2025 in an interview with Reinsurance News. He believes the broader insurance and facultative reinsurance markets have already undergone significant pricing changes since the 2024 cat season.

This shift raises a critical question for the reinsurance sector: can market discipline be maintained when other segments are experiencing price declines?

Barrington said: “In many ways, this year feels like last year. The CAT season was mild, and so far, this year has been too. At that time, the market was striving to maintain firm pricing, while brokers and buyers were beginning to question whether the hard market was easing. That sentiment seems to be resurfacing.”

However, he noted a key difference: “This year, the backdrop has changed significantly. In both insurance and facultative reinsurance, prices have dropped substantially across nearly all lines. So, while last year’s question was whether the industry could retain discipline, this year’s is whether it can do so when other pillars of the market are facing major price reductions.”

Barrington acknowledged that the current market remains profitable, with strong investment returns allowing carriers to absorb the pricing pressures. Yet he cautioned that a loss of discipline could lead to compromises on retentions and broader coverage terms.

“It’s largely about retention,” he said. “Although it’s early, there seems to be an acceptance—even among carriers—that pricing will decline. But that’s not their main concern. What they’re keen to avoid is loosening retentions or expanding coverage too much.”

He stressed the importance to carriers of maintaining discipline, especially as the market potentially enters a softening phase. The current environment, he said, offers sufficient returns and product stability to allow for some softening without immediately threatening profitability.

“If you’re a treaty carrier, you’re likely seeing prices start to fall but are still expecting continued profitable underwriting. That will change quickly if discipline is lost. When pricing drops and coverage broadens and retentions shrink, profits can erode rapidly,” Barrington warned.

He concluded, “Discipline will always be important. Pressure will come from clients, and from us as brokers, to secure broader coverage and lower retentions. The balance will be interesting to watch.”