Present conditions in the reinsurance market are not necessarily all “doom and gloom”, according to Nick Frankland, CEO of Europe, Middle East and Africa operations at Guy Carpenter.
This is, in part, due to a wide variety of supply translating into choice for potential customers.
At a recent symposium in Baden-Baden, Frankland said: “We must become expert in and able to advise our clients on all that is available, helping to create solutions that exploit this cornucopia.”
He continued to explain the industry must work with the reinsurers and insurers to stimulate demand by filling known insurance gaps and providing solutions for the new breed of risks.
Offering the reinsurer’s perspective, Ulrich Wallin, chairman of the executive board of Hannover Re Group, stated that traditional reinsurance offers far more than just capacity.
Wallin stated: “Our long-term orientated business model provides extensive experience in assessing current and future risks, in managing risks, and in creating tailor-made risk transfer solutions.”
He continued: “We support the development of covers for emerging and future risks, for instance infectious diseases, technological and cyber risks. In addition to the support offered for sensing new business opportunities, we also provide distribution capabilities particularly for life and health products in new markets.”
Providing insight into the changing approach of the reinsurance buyer, CEO of Allianz Re, Amer Ahmed, highlighted the increasing strategic value that reinsurance provided.
“We are seeing a shift towards the use of reinsurance as a strategic tool to manage capital and [earn] volatility from a group perspective, and away from a trading activity at an individual entity or line of business level.”
Brian Duperreault, CEO of Hamilton Insurance Group considered the impact of the capital markets and addressed the question of whether the reinsurance industry faced an existential threat.
He commented: “I don’t think that the threat faced by the industry is existential. Yes, it is at a critical inflection point, but we have seen a number of inflection points before and it is usually a place where real opportunities lie.”
“At the end of the day we are all risk takers. We place a risk and match it up with the best possible capital. How well we match risk to capital will be driven by how well insurers, reinsurers and brokers adapt to the winds of change.”
