Berkshire Hathaway’s managing director of international reinsurance talked to GR about the big challenges and the lessons learned
It’s day two of the MultaQa Qatar conference. How have you enjoyed it so far?
MultaQa is a very interesting conference. It is my second time here and it is a good mix of high-level speakers. There is also a good discussion, so I find it to be very worthwhile.
You sat on a panel this morning. What was discussed?
We talked about the international reinsurance situation and the prospects for the reinsurance industry currently and, going forward, what needs to be done to make the industry more interesting in terms of earnings and being a proper industry for the region and elsewhere.
What was the main conclusion from that panel discussion?
That reinsurers must explain their product better. Reinsurers must also strive to get a proper price for their product in order to fulfill their function.
What have reinsurers learnt from the catastrophes of 2011?
I think the big lesson there was that scenarios that are not on your radar screen can happen and they can accumulate over the year. All the catastrophes are what I call class C catastrophes, which are not the ones the top catastrophe reinsurers would normally expect. We have to watch out for that, we have to ask for proper prices and we have to watch the aggregation of loss.
What is the most challenging part of doing business in this region?
There is an imbalance of supply and demand for reinsurance capacity: there are a lot of providers here. The market over the years has deteriorated regarding price adequacy, and margins for local companies are very thin, as some of my colleagues have outlined. That is an ongoing problem that the industry needs to cope better with.
Manfred Seitz is managing director of Berkshire Hathaway Group’s international reinsurance division