Speaking to Reinsurance News at Rendez-Vous de Septembre in Monte Carlo 2026, Chris Sandilands, Partner at Oxbow Partners, the insurance and reinsurance-focused strategy consultancy, discussed the January renewals, the state of artificial intelligence adoption across the market, and what he believes separates reinsurers building lasting advantage from those simply riding favourable conditions.
On rate movements at the January 1 renewals, Sandilands said “The overall direction of travel is clearly downwards, although I think it is important not to reduce the market to a single headline number.” He noted that “the headline index people tend to focus on is property catastrophe, but that is only one part of the overall reinsurance market.”
According to Sandilands, “one of the more interesting data points from Monte Carlo was Munich Re’s commentary, which suggested that property cat is a relatively small part of the broader story,” adding that “other lines of business appear much more stable, even if there are clear areas of pressure.”
Even so, Sandilands pointed to “meaningful pull-backs across the market”, citing figures showing “RenRe, for example, cut its top line by 12.5% year-on-year in Q2, while Munich Re and Swiss Re were both down around 10% in P&C reinsurance.” He said “that suggests there is still some discipline in the market.”
At the same time, he observed that “many clients are talking about ‘pockets of opportunity’,” explaining that “some of these will be areas where reinsurers defend existing business hard; others may be genuine opportunities to write new business,” and that “as some players reduce exposure to areas such as US casualty, they will inevitably look for growth elsewhere to protect volumes.”
Sandilands said “the question, from a strategy perspective, is whether those opportunities are truly attractive or whether they are partly the result of looser assumptions and optimism.” As he put it, “in theory, time will tell. In practice, European reinsurers have built up significant reserve buffers over the past two to three years, which means some underwriting under-performance could be masked in the P&L for the next year or two.”
Turning to artificial intelligence, Sandilands said: “AI is both fascinating and difficult to pin down because it is such a broad topic.” He observed: “You would think that a technology powerful enough to concern governments about cyber and infrastructure risk would be able to transform treaty underwriting, yet many reinsurers are still working through submission ingestion and underwriting workflow automation.”
According to Sandilands, “the reality is that many reinsurers will privately say they are either still at an early stage of AI adoption or are struggling to scale it meaningfully.” He said that “over the past 18 months, we have seen a proliferation of proofs of concept and experiments,” adding that “in that sense, the AI cycle has some similarities with the InsurTech cycle ten years ago: there was a rush to experiment, a lot of bold claims, and then a more difficult journey to turn activity into real value or structural change.”
Sandilands said genuine progress today is visible in “relatively practical use cases: submission ingestion, triage, claims processing and other process-heavy activities.” He noted these “can deliver real efficiencies, but we think many of these benefits will commoditise over time.” For Sandilands, “the more interesting question is how AI changes the operating model,” meaning “moving beyond narrow technology pilots and asking how the business itself should be organised to create value from AI.”
He said: “We are seeing less progress on building multi-disciplinary teams that bring together underwriters, data specialists and AI experts to create differentiating capability,” adding that “in some ways, that is similar to how hedge funds brought trading strategy and quantitative skills closer together.”
On the obstacles to adoption, Sandilands noted that the main challenges fall into two categories. The first, he explained, is that “data quality and accessibility remain major barriers for all but a few reinsurers, and until those issues are addressed it is very hard to build truly differentiating AI tools.”
The second is strategic: “The technology is moving so quickly that companies are finding it difficult to know when to invest, where to focus and whether to partner deeply with vendors or stay more vendor-agnostic.” He added that “it is increasingly accepted that AI does not automatically reduce costs; in some cases, it can increase them,” meaning “companies need to be much more disciplined about where they deploy AI — and just as importantly, where they choose not to.”
Sandilands acknowledged that there are several obvious candidates for drivers of change in the market, such as “climate change, geopolitical risk, alternative capital and sidecars are all well discussed,” but said he would “take a slightly different angle.” In his view, one of the biggest drivers of change will be the need for reinsurers to mature their operating models.
He said: “The market has been very favourable for underwriting over the past few years, and that has papered over a lot of cracks.” Many companies, he noted, “have grown substantially — in some cases moving from monoline specialists in one territory to businesses with multiple lines, platforms and geographies,” with “some now have hundreds of employees rather than dozens.”
Sandilands said the challenge “is that the operating model has not always kept pace with that growth.” In the quote that gives this article its title, he said: “A lot of companies now need to move from being ‘big small companies’ to ‘small big companies’.” He explained: “By that I mean they need to become more efficient, scalable and joined-up without wrapping themselves in big-company bureaucracy.”
This, he said, “will require management teams to think much more carefully about who does what, how business is processed efficiently, what technology and data capabilities are required, and how AI fits into the future operating model,” concluding that “the leading reinsurers in the next cycle will be those that can make that transition successfully.”
On the strategic questions reinsurance executives face today, Sandilands pointed first to capital allocation. “A large proportion of reinsurers today sit within broader, diversified insurance groups,” he said. “As group CEOs read headlines about a softening reinsurance market, reinsurance CEOs need to explain why continued capital allocation to the sector still makes sense.”
He added that “that conversation needs to be more nuanced than the headlines suggest,” because “there is no single reinsurance market cycle,” with “some of the pressure concentrated in very visible lines such as natural catastrophe, while other parts of the market may be more stable or may still offer attractive opportunities.”
The second question, Sandilands said, “is how to respond to a softer market.” While “some companies are under pressure to stand still,” he said “our view is that simply standing still through a soft market is not usually how companies win across the cycle.” He added: “The best companies continue to look for pockets of growth and continue investing in the capabilities that will make them stronger over time.” The third question, he said, “is AI, which we have already discussed,” creating “a broader set of strategic questions around underwriting, data, technology, operating models and cost.”
Sandilands said talent is an underestimated challenge, with AI reshaping the skills reinsurers will need and making succession planning increasingly important. He added that lasting competitive advantage comes from strong strategy, not simply favourable market conditions or reliance on “superstar” underwriters.
“The more resilient companies understand that underwriting is an integrated process,” Sandilands said. “Underwriters remain central, but they increasingly act as coordinators, decision-makers and relationship interfaces within a broader system that includes data, technology, portfolio management, operations and AI.”
He described this as “a significant emotional transition for many management teams, particularly in a market where many leaders have underwriting backgrounds,” but said “it is an important one.” Sustainable competitive advantage, he said, “will come from having a clear view of the future of underwriting, a scalable technology- and AI-enabled underwriting process, and a clear understanding of the talent required to deliver it.”
Sandilands said this “also requires discipline around strategy.” He explained: “the strongest companies have a clear strategic vision, a framework that explains what matters, and a set of priorities that employees can understand and act on.” He noted that “many reinsurance businesses are relatively lean compared with primary insurers, so they do not always have large strategy or transformation teams,” which “makes clarity even more important.”
He concluded: “In a world where data, technology and AI will play an increasing role, companies need to know where to invest, where not to invest, and how each initiative links back to their strategy. Those with that clarity are much more likely to build sustainable competitive advantage than those simply riding favourable market conditions.”
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