Global Reinsurance invited several leading members of the Dublin international financial services community to a roundtable lunch to discuss the proposition that Dublin's re/insurance sector has reached critical mass and can now be regarded as a re/insurance marketplace in its own right. Participating in the roundtable lunch, held at the Shelbourne Hotel, were PJ Henehan, a partner at Ernst & Young, Ian Branagan, managing director of Renaissance Reinsurance of Europe, Tony Hardy, general manager of Starr Excess International, James Hooban, managing director of ACE European Markets Insurance Ltd, Eamon O'Brien, managing director of Aon Insurance Managers (Dublin) Ltd, Catherine Graham, international insurance representative in the financial services division at the Industrial Development Agency of Ireland, Dermot O'Donohoe, managing director of XL Europe Ltd, and John Larkin, partner at William Fry solicitors. Sarah Goddard, editor of Global Reinsurance, moderated the session.

Sarah Goddard: To launch straight in, is Dublin a marketplace?


Catherine Graham:
I think it depends on what you define as a market; a market is buyers and sellers and there have not been many buyers to date in the reinsurance market in Dublin. There are plenty of people operating here now, and we are very happy with the way things are going. It's a growing market in its own right.

Dermot O'Donohoe:
I think Dublin has developed into a vibrant insurance market, particularly for certain lines of business, both insurance and reinsurance. Speaking on the insurance side, you now have about $500m-worth of limits between ourselves, ACE, Starr, Liberty. You can put together substantial global programmes now in Dublin. The major brokers, Marsh and Aon, have dedicated broking operations here to support us. I think the larger and more complex transactions are being done here in Dublin, not maybe exclusively, but certainly we are a substantial part of programmes and I think a number of the major buyers have now put Dublin on their list of the places to visit. I think it's very definitely a marketplace for more and more lines of business.

Sarah Goddard:
From Aon's point of view, is there a broker market here yet?

Eamon O'Brien:
We believe so. We've just opened Aon Re and the response has been very positive. I think the other thing that we are trying to do is to develop a sort of second tier in terms of the reinsurance market. One of the things I'm looking to do is to encourage what I regard as second tier, younger companies to establish here and our company will provide an incubator service for them. It's up to us to encourage them to get in here. It's a case of trying to complete the process of actually getting them to come in here and our company will offer a service in terms of putting an arm round their shoulders, getting them in for the first couple of years, providing them with offices, until they are ready and willing to cut the umbilical cord so to speak and work on their own. So there is a lot of interest out there; it's a case of harnessing that interest.

Sarah Goddard:
What is it that's bringing people and business into Dublin?

Tony Hardy:
I think that if you move in Europe outside of London, which is a very complex marketplace, and perhaps if you want something that has more focus – and I think certainly something that has appealed to the continental Europeans who may prefer to deal with a comprehensive and high capacity market in Dublin than go into London where a lot of their programme management might get diluted by some of their London broking staff. And I think that they can see another marketplace – easily $500m – if they can see that and start to think about tranche buying at an excess point, particularly if they were to think about accounts reported, that would be particularly easy. The big industrial business in Europe could find Dublin a very easily accessible marketplace with quite efficient broking times, which is not necessarily the case in London. So, I think it's a question of you put resources in London, of course you would – Starr has resources in London because there's a marketplace there, it's been there a long time, it cannot be denied or ignored – but if you want to be somewhere else in Europe there isn't another area that has the logic of Dublin because there is the critical mass building.

Sarah Goddard:
But is that being recognised yet by the buyers?

Dermot O'Donohoe:
More and more clients are coming to Dublin. I don't know what the proportion is, but I'd say 25-30% of our clients visit us now.

Tony Hardy:
They are coming, so it's getting back to the old thing of where the client meeting is taking place. I think that will happen more as the market hardens as well, because the clients want to get back in control of their programmes a little bit.

Jim Hooban:
We have seen a pretty regular flow of clients coming into the centre, wanting to have client meetings. Dublin has been publicised pretty widely all throughout Europe. It's pretty well known that the Dublin marketplace is really working, that there are large carriers here.

Eamon O'Brien:
I think a lot of it as well is that European nationals don't necessarily like to end up at the London market, they are actually more comfortable dealing with the Dublin market. Certainly those are the vibes I've been getting from several people recently and I think that's something that we've got to use to our advantage. Dublin is a nice city in itself, which is a help, and I think the way in which business is done here – the market is small and tightly-knit, and has the capacity levels we've been talking about. It's up to us to basically go out there and drag in people from other countries to come here.

Tony Hardy:
It's kind of neutral here, isn't it? I think it has that feel.

John Larkin:
I think the task is much easier in terms of trying to attract people in. I guess in terms of companies setting up, in the old days you had to deliberately educate somebody about Dublin's advantages and in some cases where Dublin was on the map, but that's all taken for granted now. People are coming in and they are asking pretty well-informed questions about the specifics of establishing in Dublin, which I think shows that they've done their homework. Therefore Dublin is well known internationally; we've done all the groundwork, it's just a question of maintaining that growth and encouraging buyers to come in. We want to encourage more sellers into the market.

PJ Henehan:
The IDA in particular deserve great credit for that. In terms of the future, I think another very significant backer would be the single currency, when that comes in finally. I think that will greatly help in developing business with Europe and maybe give us that added impetus.

Eamon O'Brien:
It would give us a competitive advantage over the UK.

Dermot O'Donohoe:
We should also remember though that we are not just writing European business, any of us, we are writing global business. Being part of the eurozone is important for us, but we probably write a bigger proportion of dollar income and sterling.

PJ Henehan:
The euro should enable us to write more European business going forward hopefully.

Ian Branagan:
The other key thing is actually the mix here. A lot of the guys here are reasonably heavily oriented towards the lower end of the risk transfer scale on the reinsurance side. We are very much on the other end of that market. There has certainly been a move in the last 18 months to more people being here, writing real risk transfer stuff. That's pretty key and that goes through to getting more brokers and broking that class of business in. I see that growing; it has grown in the last year certainly. I think you are going to see that more and more.

Eamon O'Brien:
In terms of the reinsurance business one of the big events recently has been the recent authorisation treaty with the US for the FET (Federal Excise Tax) exemption which is a huge advantage to a lot of the reinsurers. At the end of the day they are in a position to exploit that, which a lot of them are doing, and that is another string to our bow. One of the things we are trying to do at the IFSC insurance group is see what parts of the market we haven't really got a hold of, how can we basically, to use the shop terminology, make sure your shelves are fully stocked with as many products as you can. We've had big players in excess lines and insurance, but there are still some more reinsurers out there and it's a case of trying to attract them in. But I think they are now seeing that there are a lot of people already in Dublin and they are asking themselves why they are not here; they are now asking themselves the question rather than us asking the question. I think you are going to see in the next one to three years all major players in the reinsurance market are going to be here and with the brokerage companies, Aon included, setting up presences here there is an active market for them to broke to.

Sarah Goddard:
How far off that do you think Dublin really is?

Eamon O'Brien:
Not that far. In terms of the new tier of reinsurers, if we can bring them in then more and more of the market are going to want to be here and that's the key thing. I think we've made our name; now it's just a case of expanding on it.

Catherine Graham:
We are beginning to receive unsolicited calls from London-based reinsurance companies. There's a feeling, ‘we should be there' from them.

Jim Hooban:
I think it's the whole reason for ACE really making some strong strides right now to extend itself. It is the idea of bringing ACE Bermuda into a European context and making the capacity and capability available to European clients through a local presence. And that's an excellent compliment to the parent company.

Sarah Goddard:
A couple of years back there was quite a strong sentiment that people wanted to see Dublin as the Bermuda of Europe. Has it achieved that format or does it have its own identity?

John Larkin:
I think the advent of new players is very relevant. We are not just the Bermuda of Europe because I think that, if you look at the spectrum of companies, you've got companies who are setting up here from Bermuda to attack the European markets. You've got big companies who want a certain flexibility that we can offer here, setting up here. You've got a nest of German reinsurance companies that have set up here. So there is a huge mix of players in the Dublin market which re-emphasises the fact that it is quite a diverse, fully-rounded market. So being the Bermuda of Europe is a compliment in one sense but in another sense it limits or isn't a fully appropriate description, there's much more to it than that.

Eamon O'Brien:
There are two other things. I think an awful lot of companies that are here are not really here for tax benefits. When the IFSC was established it gave some a 10% tax benefit, but I know certainly with my client base, tax issues are not the most important reason for being in Dublin. It's a marketplace, it's competitive in terms of cost, etc, etc. One of the things we should perhaps be looking at is to start to take on some of the London market. London is a very expensive place to do business, far more expensive than here. You know with e-commerce the way it is today there is absolutely no reason why a lot of these companies couldn't locate in Ireland.

Ian Branagan:
From Renaissance Re's point of view, we are basically a short-term property reinsurer. One of the obvious places for us to be would be in London, but we chose Dublin instead for a variety of reasons. It's partly because of the nature of the business we write – we are looking at a small number of big deals, we are not really a subscription market operator, so it actually makes a lot more sense for us to be here than in London. We don't miss the passing trade.

Tony Hardy:
Is this like a town with a lot of insurance companies in, or is it an insurance marketplace? A marketplace needs lots of brokers, and lots of brokers – like in London – almost force a subscription market. Now, it's going a little bit in London because people are going to have to realise that it's a fairly inefficient way of placing and you know you've got a lot of underwriters there, particularly in Lloyd's, that just play ‘follow my leader' with huge reinsurance files. Here in Dublin I think what is lacking is enough broker strength to really make us a market – up till now it's really only been Marsh Global Broking.

Dermot O'Donohoe:
I think what Tony's saying is right, we'd all like to see more brokers here in the market, but I guess effectively we've functioned up to now as a satellite of London. Typically, the business has come from London brokers and all we've managed to do is close the gap. We've been effectively part of the London market without being in London.

The big advantage for any company with the tax and regulatory requirement in Ireland is the ability to do business with any European country without being there. It makes Dublin part of the European market and pulling business out of Europe, from anywhere in Europe without being there, that's the angle I think we've all be playing. Certainly for us, regulatory flexibility has been a key reason for us being here, quite apart from the fact that you can be non-London when it suits you.

Jim Hooban:
I think we are also seeing a movement of brokers, clients and insurers in and out of Dublin. There are various other places in Europe that indicate that sort of continuation of activity that is intermediated, but maybe not done so from local brokers.

Dermot O'Donohoe:
All our business is intermediated so it's a case of are we still a viable marketplace because we get 10% of our business from German brokers. We see Dublin as being the focal point because it still makes sense for us to use the regulatory requirements and the tax environment in Ireland. For example, in France we wouldn't have the same reinsurance flexibility if we were regulated in Paris as we are here. The capital is here, the business is here, but we want to actually have representation in other countries, such as our Paris office.

Ian Branagan:
There's a lot of capacity here, but in addition a lot of the decision-making capability is here and that is another key reason why Dublin is growing.

Jim Hooban:
In the more complex deals, the combinations of reinsurance and financial backing and what have you, the particular venue of the underwriting is just not so important as basically knowledge of client.

Tony Hardy:
With the sort of product that's being provided here – large capacity on heavy risk – they are not so naïve as to think they are walking up to an old-style Lloyd's underwriter who is going to make a decision on the spot. Everybody knows there's referral points. If you really want to get hold of the sort of really good capacity and well-rated capacity that's available, that's something that takes thought.

When I go travelling I say to people, don't think at me even necessarily as Dublin; if I'm in Belgium I'm part of the Brussels marketplace, I'm part of the Frankfurt marketplace, I'm part of the Paris marketplace. And that's the issue.

I think the neutrality of Dublin eases that as well. We are asking clients to think of us as part of their marketplace. That's what the Freedom of Services should have always been about. That's not to take away the fact that it's a marketplace here because there is this big gathering of re/insurers but it allows people to get out there from a base and say, we're part of you, we're European.

Sarah Goddard:
That also demands the question whether it is necessary to have a marketplace in one location? If re/insurance is becoming increasingly disintermediated, is there going to be necessary to have specific marketplaces in specific locations?

Tony Hardy:
I don't think any of them are marketplaces in that same way anymore. I don't think we should even try and copy the London marketplace because I don't think that's what any of us want.

Jim Hooban:
For us being here in Dublin and precisely where the intermediaries are, where the brokers are located is now less important. And those reasons have to do with convenience of regulation and so forth and accessibility of critical people and the whole set of benefits that people have already talked about. I think that a marketplace is attractive here for various reasons. It has to do with those and, at the end of the day, it doesn't really matter where the brokers are.

Dermot O'Donohoe:
Not now, not in the business that we are talking about. I think it's useful sometimes to specialise and focus your broking as Marsh and Aon have done in terms of having the specialist skills. Probably the biggest problem we experienced in the initial days was you've got these big monolithic brokers – where do you start? So you have somebody working on the inside to help promote the products and obviously this is of considerable benefit and we would be the first to say that that helps us tremendously. But apart from that, with the accounts we are dealing with, the expertise that London has and some of Europe, the international broking houses, we are dealing with complex risks, broked by people who know what they are doing. Now I think Dublin has really got a group of people who can sell these risks now and price them.

Sarah Goddard:
Moving to the regulation aspects, reinsurers now find themselves subject to light regulation, with the possibility of it becoming stricter in the future. Will that make any difference to the development of Dublin?

John Larkin:
Not in terms of the changes that were introduced by the Insurance Act 2000. All that's really done is copper fastened the notification procedure that was in place since the end of 1999 and gives the Minister powers to gear up the amount of legislation, the amount regulation if he chooses to do so. But I understand that there are no intentions of doing that unless something catastrophic happens.

Eamon O'Brien:
The other thing is the increase in the share capital which is now I£500,000, which is a significant enough amount. At the end of the day, we don't want people in the Dublin marketplace that won't potentially start booking business, and putting the share capital up to a level that is substantial should deter any fly-by-nights.

John Larkin:
I think actually that most companies would already have way in excess of that, either by equity or capital contributions. You can't go and be a credible party in the marketplace if you've got some two pound bit of share capital, so I don't see that as being an issue for the vast majority and those for whom it is an issue, well maybe they're not people we want to have in Dublin.

Catherine Graham:
I think that the enabling legislation probably reflects the point that there is a market here.

PJ Henehan:
Ireland is perceived as a well-regulated location in any case, so a minor change like this is not going to have any long-term impact in any way at all; in fact, it's probably likely to have a positive impact, if it has any impact at all.

John Larkin:
We had a situation some years ago where a client was setting up a reinsurance operation in Ireland and to get approval from their home regulator they needed an assessment of the level of regulation in Ireland. They actually had to rely on some of the Companies Acts, the powers that the Minister has, to show that there was a demonstrable level of supervision and regulation, because before the new Act came into place it was really quite minimal. Now with this new Act we've got a credible body of regulation. It's at the right level; it's not too heavy-handed and the powers are there if they need to be used; I think it's ideal. What's going to be interesting though is the CEA (Comité Européen des Assurances) proposal to introduce pan-European regulation for reinsurance which if it comes in will present some interesting challenges, because that would force Dublin's hand in terms of margins and in terms of ongoing supervision. As we know, there's a variety of regulation across Europe, ranging from what we have in Ireland to the position in the UK, which is almost as per direct writers. I think if that comes in, it may cause some of the operators here to look long and hard at their business models. But it will present some interesting opportunities because it will mean that there will be pan-European passports for reinsurance entities and if you look at the success of direct writers that have come into Ireland transacting pan-European business I think that reinsurance entities should be able to replicate that success.

Eamon O'Brien:
I think the good thing is though, I talked to the regulator recently and she said it's at least five years down the track before this will happen. Part of me says that reinsurance regulation is a good idea and part of me says well, if it ain't broke, don't fix it. When you get an industry point of view of the whole reinsurance company field here, there's only one potentially problematic company. If you consider that the many hundreds of reinsurance companies you have here in Dublin I think that's a testament that we have attracted quality business. Certainly now we have the qualifications and the entry level applications. At the end of the day that's what we'll achieve if we want to achieve it. You don't necessarily want to end up spending 10-20% of your time on administrative and regulatory requirements that are not necessary. There are arguments both for and against stricter regulation.

John Larkin:
But it's not going to be a huge step from where we are now to full regulation in terms of the attitude that the people here have towards the Irish market. They perceive it as being well regulated anyway, so I don't see it as huge change.

Jim Hooban:
It might give us a bit more freedom to be able to move around, to be able to move your company's business from one venue to another in a freer way. Several companies have established branch operations and extended their operations outside of Dublin to help them feel closer to the buyers and having that capability as regulated reinsurance enterprises is one benefit that could well come of it.

John Larkin:
That's one of the end games of the CEA. In the proposal paper they say once you regulate reinsurance at a European level, what they want to do is get European reinsurance entries into the international market more easily, particularly the US market where you wouldn't have to produce letters of credit and trustees and so on to underwrite US business. If it actually achieves that, it will open up opportunities for the Dublin market. But it's a long way away.

Sarah Goddard:
On the European side, with the amount of disquiet there seems to be among the member states of the European Community about the Irish tax position, will that have any effect on what's going on here?

PJ Henehan:
No I don't think so. I think that the French are probably the front runners in the bashing of Ireland in relation to our tax rates and I think they tried in the most recent EU summit, when they were still president, to get some changes. It was quite obvious that there was no appetite among the majority of member states for any interference in domestic tax policies. I think the issue of harmonisation of direct tax rates in Europe must be a long way off. A very, very long way off, I think.

Eamon O'Brien:
One way the EU have decided we made the application, they subscribed to the way in which we were handling ourselves as a country. If you look at marginal tax rates around the world, the Irish marginal tax rate prior to all these changes is about 17%, taking into account the manufacturing business which is taxed at 10% by EC dispensation, plus the IFSC business taxed at 10%, and merged it in with all the domestic business. This effectively moves the tax rate to 17% from the original upper limit around 40% corporation tax rate. An awful lot of the other countries have the same types of systems, with more deductions.

PJ Henehan:
The extraordinary issue there actually is the German example. The apparent rate of corporate tax in Germany was about 60% when you took into account local taxes and church taxes and everything else. But the actual effective rate, given their ability to depreciate assets, to set aside reserves, etc, was about 19%. So if you looked at the headline rate their corporation tax rate was twice ours, but the effective rate there is only a difference of 2%. And they are reducing their tax rates now. All the major industrial and financial companies in Germany apparently were interlocked in terms of cross-shareholdings and they brought in this exemption from capital gains tax specifically to enable them to unwind from one another.

Dermot O'Donohoe:
They said there was going to be a $20bn tax bill and these companies are so valuable, they all own 5% or 10% of each other, so they just waived it, which I think is good because I think it will finally open Germany up.

Sarah Goddard:
So is that another target market as far as Dublin is concerned then, picking up German business as it comes through?

Dermot O'Donohoe:
It's the biggest insurance market outside the UK, London. The actual penetration by non-German companies is minimal.

We are all just walking round the edges of the business. You know, there is a serious problem that the German companies don't have an appetite for or something maybe they are not in a position to do. It is unquestionably such a huge potential marketplace for us all. If we could do the insurance of 50% of the top one hundred German companies we'd be all delirious.

Tony Hardy:
We'd be a bit richer! This is why the Dublin market is very different from anything else; the huge net that's held in Dublin. It's a crucial difference. I mean, if people were looking to place really strong, consistent programmes they really ought to look at not just the facultative business but some of the treaty reinsurance that is behind a lot of the industrial European companies. And it's all very well for large European re/insurers to put these big lines on things, but it's all being sucked out the back. Here in Dublin they don't need to rely on large reinsurance programmes. They've got a very strong net market.

Sarah Goddard:
Are brokers recognising that strength, and coming over to use it?

Dermot O'Donohoe:
Well, I think Tony is right, the business is controlled differently in the German market than any other market but our preferred route is to be dealing directly with brokers. Dublin offers a big advance, because there is expertise here through underwriters, and there is a market here as well, we have substantial net capacity. We all buy some reinsurance, but at the end of the day it's not what's driving our business and that's important.

Ian Branagan:
It has to be sustainable. If it's driven by net, it could lose sustainability.

Sarah Goddard:
Getting back to the theme of Dublin as a marketplace, is there really a need nowadays for another marketplace?

Tony Hardy:
There is no need for another London marketplace, and I think that's not what Dublin is.

PJ Henehan:
That's a good point because everybody thinks in terms of the market being the London market and I think you've made that point before that there isn't really a need for another London.

Dermot O'Donohoe:
But none of them do what we're doing. None of our companies represent new capacity to the market either. We are not all coming out with additional capacity. All we are offering is the same capacity as our parent companies can offer in Bermuda. All we can do now is offer the same capacity in one more place. We can offer the same capacity in the US, Europe, internationally or wherever, it's the same, so it's not like we're creating new capacity. It's really just better access.

Jim Hooban:
I think the fact that it's growing and thriving would indicate it's welcomed and publicly needed.

Sarah Goddard:
Why has there not been a complete start-up here? There have been no new start-ups on the reinsurance side.

Eamon O'Brien:
Anything that is new recently has come out of the Bermuda marketplace. All the investors are more familiar with the Bermuda market and set up there first. Some of them have now become interested in setting up in Dublin. Small second-tier reinsurers are beginning to decide they want to try and get in here. And they're deciding that right away now, rather than some companies in the past which have decided to stay in Bermuda for five years or so before extending their operations.

PJ Henehan:
There is new blood coming in. I have a ground zero set up, though for reasons of confidentiality I can't mention the name at the moment. But the shareholders backing it are already in the insurance arena.

John Larkin:
But what you are seeing are some completely non-insurance but capital market players setting up reinsurance operations, looking into reinsurance, getting into finite reinsurance. I think that is a trend we are going to see continuing.

Sarah Goddard:
Obviously there's quite a lot of that happening in Bermuda now but as far as I'm aware there aren't any of the bank subsidiaries that have set up here yet. Are any planning to set up in Dublin?

John Larkin:
We have a couple, again I can't give names of them, but one of them is a major banking organisation and the other is a continental bank.

Sarah Goddard:
Which leads on to another question. It appears to me that a lot of the new products, the new ways of transferring risk, are being focused on in Dublin a lot more than in other jurisdictions. There appears to be a concerted market effort towards providing alternative risk financing.

PJ Henehan:
Absolutely, and we've just had the first tranche of securitisation transactions done in Dublin and they are proving to be very successful. We are hoping that we'll get a lot more of that business.

Sarah Goddard:
Why are they happening here?

PJ Henehan:
There are regulatory, tax, cost reasons that are involved. Obviously there are some specific areas that I don't want to go into because they are common to the two transactions that were done. I was involved in both of them, in structuring both of them, and we had obviously a long period of negotiation with the Irish Revenue to get the deals done because what they were trying to do didn't fit exactly within the securitisation legislation that we have here, but at the end of the day we were able to persuade the Revenue to make the right decision, so to speak. And we have now done two of them, so I would be hoping that there will be a lot more. The two that we've done originated in France and we would be hoping that other countries would now be looking favourably at Dublin. Those two have put us on the map with the capital markets and investment banks and they were very happy with the outcome. What they found was that it's not quite as easy to do these types of transactions in Ireland as it is in the Caymans, but having said that we have proved that it is possible and that with just a modicum of care and attention it is possible to get the transactions to fit within what is possible under the Irish well-regulated environment in terms of company law, tax and also the reinsurance issues insofar as they are there.

Sarah Goddard:
But why would somebody decide on Dublin rather than the Cayman Islands?

Eamon O'Brien:
Because in the OECD tax investigation recently, we came out certainly a lot stronger than many other insurance and reinsurance domiciles. A lot of the island domiciles now are under increasing scrutiny and consequently certainly the corporates are not going to want to locate there.

PJ Henehan:
There are a couple of other reasons why they would come here. One, basically the quality of people that you are dealing with and the ability to get things done. I suppose the fact that we are in Europe, we are in the EU. We are in the same time zone for European transactions. I think we are a bit away from being able to attract US business just as yet, but interestingly enough I have one Cayman-based operation which is, in fact, thinking of moving their entire base into Dublin.

John Larkin:
There's a perception from some buyers that they just don't want to buy a Cayman product. If an investor was, for example, a pension fund, it would probably be prevented under its constitution to invest in a non-regulated product. If you can bring that product into a regulated domicile like Ireland you are opening to a much broader market.

PJ Henehan:
And what companies are going to run up against in these jurisdictions on another level is that, let's say they want to do an acquisition in Europe, the regulators in Europe would not allow them to have a holding company in the Caymans or possibly down the road even in Bermuda.

Jim Hooban:
A Bermuda-based company I guess would see our local accessibility being really the biggest advantage that we get here. Technology transfers pretty easily these days and staff again are very capable here in Ireland. Tax isn't really a consideration for us, but really more the local accessibility. I think you've said it a couple of times that, you know, the idea of being in Europe, being in the EU, being able to deal directly with clients, that's pretty key, that's a fundamental sort of reaching out into another whole marketplace.

Dermot O'Donohoe:
For us, it was the first time we were admitted. We were writing a lot of business from Bermuda but not admitted business so you know, you are coming in and you are on a level playing field with your competition now.

Eamon O'Brien:
I think also in terms of Europe, Dublin and Ireland have got a very bohemian fe el to the whole place. People do like to come to a place that's fun to do business. Going back over the years, Bermuda was an attractive place, there's nice weather – you don't really have that here – it was a nice place to go, but an awful lot more people enjoy coming to Dublin now. I know all of our clients coming in say they enjoy spending time here and that's a big plus that you can't discount in terms of our overall success rate.

John Larkin:
It's also a very valid point from the point of view of attracting staff into Dublin. One of the problems they all tell you is it's virtually full throttle employment now. I think the fact that Dublin has this reputation makes it considerably easier to attract staff in. There was a piece in the Financial Times late last year describing Dublin as being a city with what they described as the ‘X factor'; people just recognise the name and think it's a good place to be. and I think that is undoubtedly the case. The stats are I think about 1,000 people a week emigrating not just into Dublin but into Ireland. A lot of those obviously would be coming to Dublin. So it's pretty impressive.

Sarah Goddard:
But as a result, there is a potential staff shortage. How do you attract people to a city where property prices are getting higher, where inflation is high and where indicators suggest the economy may be getting close to overheating?

Dermot O'Donohoe:
It means it is difficult to bring people above a certain level because housing is usually expensive, the infrastructure is creaking, as well as the other problems that have been well documented. These are all problems of growth, but nevertheless are the sort of problems that exist. But also, the nature of what has happened to the euro over the last twelve months hasn't helped us either. We have seen huge salary increases, and then the domestic inflation rate is obviously making our costs significant here.

PJ Henehan:
The biggest frustration we have now is that sometimes some of the non-professional staff who are really mobile locally, the wage inflation that they're experiencing I'd say is close to 20-25% a year. They will leave a job and go somewhere else for a 20% pay rise.

Eamon O'Brien:
A lot of very competent people are coming in from overseas. They are interested in coming to work in Dublin for a couple of years.

There are a lot of good quality people and we've become a very multinational society, I think that's the way the market has developed. It is harder to get staff, though if you are patient you will get people. But gone are the days when you advertised and got 20 replies – now if you are lucky you get two or three. But it hasn't got to the stage that service is suffering, and hopefully that won't happen.

PJ Henehan:
I would agree with you and I think that what people are forgetting is that over the next ten years or so, there are going to be 50,000 people coming out of the education system in Ireland.

Catherine Graham:
The demographics work in our favour. There is a population way younger than any of us here and they will be turning out of university with insurance degrees and risk management knowledge.

Tony Hardy:
That's the thing. I think there's a very well educated group that has come out of the Irish education system, but I don't think they've necessarily been educated in business.

PJ Henehan:
I disagree with you there. I can give you an example of my own daughter. She's 18 and hopefully will be doing her leaving certificate this if the exams go ahead. She's already had two summers working for a life insurance company.

Tony Hardy:
I think that's the sort of thing that's started to happen. We are starting to see some of the people coming through with relevant experience.

Eamon O'Brien:
Two of the major universities here now have insurance programmes as part of their BComm programmes and they turn out absolutely quality people. They are excellent and their knowledge of insurance is top class. Now, insurance and reinsurance is seen as being an excellent career path.

There are lot of people making decisions at age 18 or 19 that they are going to go into insurance as their career. I don't think we should become paranoid about the fact that the resources aren't going to be there for the future. They will be there, and in fact there will be more resources than we certainly ever have in the past.

Jim Hooban:
The retaining of staff is something that certainly I've seen in America over probably late 1980s, early 1990s, where we saw people getting out of school and for the first five years they were taking two or three jobs for 25% increases, but then eventually it settles down.

Catherine Graham:
And the advantage if that you are getting an employee who has the experience as well as the skills.

Eamon O'Brien:
The other thing I think is great for Ireland is that in the past, a lot of us had to leave Ireland to get decent experience. Now the experience is here. Young Irish kids who are coming out from university have a career path in Ireland, they don't have to go overseas and the salaries here are competitive, so more and more of them are staying.

Ian Branagan:
From a technology perspective, in terms of Ireland becoming an increasing hub for information technology expertise, that's actually quite important for us. We are fairly heavy in technology use and back end programming, and it's here. We are able to draw on a pool of resources that we might buy on a permanent basis, but on a temporary basis and an idea swopping basis, it is certainly better than a lot of places, which is really to our advantage.

Sarah Goddard:
How much infrastructure support is now available in Dublin?

Dermot O'Donohoe:
In certain cases it's better than other markets. Telecommunications – certainly in terms of back-up service providers. In fact in a number of cases when we had global bids for certain services, service providers in Ireland won. So it's good, and in a lot of cases it's good or better than a lot of our counterparts globally.

Sarah Goddard:
What's in the future for Dublin's re/insurance community?

PJ Henehan:
The future looks quite positive at the moment. Obviously there could be a world recession which would affect everywhere, not just Ireland, but let's hope there's a soft landing.

Eamon O'Brien:
I think the fundamentals in terms of the Irish economy are good. In terms of the businesses that we have such as IT, Ireland is probably going to have a softer landing than many others. The world is not going to survive without IT. In terms of financial services, we've got an expectation now which it's taken a long time to build but it's up to us to maintain it and I think we all are aware of that.

PJ Henehan:
I think we have to keep a fleet of foot, watch what the coming trends are in terms of technology in particular and make sure that we are there. The government are very much aware of that and are very supportive of business. They want to make sure that we have as much of the capability in terms of technology and in terms of looking to the future as is possible.

Eamon O'Brien:
At the moment there are three groups for the IFSC, and that is going to continue – a mechanism whereby the practitioners talk to those people in government at a very high level. From an industry point of view, that is going to continue and that is very welcome. It also shows the level of importance that the Irish government put in terms of business that we are generating for Dublin and Ireland.

As for other moves, sooner or later you are going to get a number of companies moving outside Dublin. They won't need to be in Dublin any more and that will take some of the pressure off the Dublin infrastructure.

John Larkin:
In insurance there are few enough operations that have a big mass in terms of numbers that actually could relocate back office operations outside of Dublin, but in banking, treasury, investment bonds, heaps of organisations could relocate and there is an objective to do just that.

PJ Henehan:
The one criticism that I suppose I would make is in relation to the infrastructure. Why is somebody not saying, now look, let's build five motorways, let's start today. What they're doing is they are bypassing various towns and it's all being done piecemeal. There are some schemes starting now, but it will be a long time before they are completed.

Sarah Goddard:
Thank you everybody for coming today.