Reinsurer asks clients to ‘maintain relationships’
Swiss Re has made ‘continuity’ its key priority during the reinsurance renewals meetings in Baden-Baden.
Martin Albers, executive board member and Swiss Re’s head of Client Markets Europe said the company is looking for continuity “both in our relations with customers and in our disciplined approach to underwriting”.
He added: “In 2009 so far, conditions in the reinsurance market have continued to improve. We have a large appetite for risk and, if the price is right, we are fit and ready to provide our clients with the capacity they need. Our focus is on quality, not quantity.”
Demand for reinsurance continues to climb in the difficult market environment. As a result of the financial crisis, non-life insurers have lost around 15% and 20% of their capital, and life companies between 30% and 40%.
Interest rates remain low and the cost of capital remains high. Sound underwriting and client focus provides the basis for sustainable business relationships
German Motor market
Thomas Witting, Head of Client Markets for Germany and the Nordic and Baltic markets, will explain how Swiss Re is responding to the price war in the German Motor segment.
“This misguided development has raged for many years in the German Motor market but the insurance industry has failed to counteract it. Swiss Re needs to take decisive action to ensure the price war does not have a long-term negative impact on the profitability of our proportional portfolio,” he said.
In response to this trend, Swiss Re will review Motor treaty conditions on a client-by-client basis and make amendments where necessary.
“In these difficult times we are there for our clients and we will stand by those clients who offer profitable terms and conditions. We will become more selective in our underwriting, and are not prepared to participate in the erosion of Motor prices under our reinsurance treaties. We will find customized solutions together with each client – in the atmosphere of continuity and sustainability they have come to expect from Swiss Re,” he said.
Property Nat Cat In Europe
Swiss Re said it will provide capacity for Nat Cat events (windstorms) in the European markets at appropriate prices.
“Higher rates were already becoming apparent towards the end of the 2009 renewal season. These are long overdue and absolutely essential. We expect this trend to continue during the current renewals,” Thomas Witting said.
“Swiss Re will remain flexible in discussions with clients and we will try to find acceptable solutions that suit their needs. If extra capacity is needed for European windstorm cover, we will provide it at the right price,” he added.
Swiss Re said that while Nat Cat pricing in Austria needs to be addressed, Central and Eastern Europe continues to offer good growth prospects.
Beat Strebel, Head of Client Markets for Austria, Central and Eastern Europe will reflect on the Nat Cat situation in Austria: “In Austria, Swiss Re needs to take action with respect to Nat Cat reinsurance treaties, which are calling out for change. Given the rising claims frequency and severity from major natural catastrophes over the last 10 years, the market needs to consider whether current (re)insurance structures and prices are adequate,” he warned.
For countries in Central and Eastern Europe, while the financial crisis has taken a particularly heavy toll, Swiss Re says it is upbeat about future prospects: “In these markets we anticipate seeing exceptionally promising business opportunities and growth potential in the long term,” he added.