Mutual insurers are in a prime position to capitalise on changes in the traditional reinsurance market according to Willis Re, the reinsurance broking arm of Willis Group Holdings.
The 1st View April 2013 Renewals Report found that changing distribution models, coupled with a flood of alternative capital, have left many reinsurers concerned over both their existing portfolios and their access to future growth.
This provides mutual insurers with the opportunity to strengthen their existing relationships with traditional reinsurers and to forge new ones.
According to a recent release from Willis Re, mutual insurers have a unique ownership structure where policyholders, not external shareholders, are the ultimate owners. Meaning that they have less access to other forms of capital, and as a result, mutual insurers are often reliant on reinsurance to provide them with additional capital to deal with catastrophes and large losses.
Robert Swindell, executive vice president of Willis Re, said: “Traditional reinsurers are very aware that while some larger commercial buyers are reducing their use of reinsurance in this phase of the reinsurance cycle, mutual buyers value long-term sustainable relationships throughout the entire cycle.”
John Cavanagh, CEO of Willis Re, said: “Seismic changes occurring in the traditional reinsurance market are clearly favourable for mutual insurers. Willis Re has always been a strong advocate of the long-term business models characterised by mutual insurers, and will continue to provide analytical and transactional support in this important market.”
