Are Monte Carlo and Baden Baden still viable in an age of fewer reinsurers and cedants and multiyear deals? Will video conferencing kill these star events? Valerie Denney investigates.
I know, you have heard it all before. "It's just a jamboree. In a couple of years time there'll be no more Monte." "Budgets are too tight for this free-loader fest to continue much longer." "Is there any business actually done?" If you are a Monte afficianado, you have probably heard it all after. Those left behind console themselves with the thought that it will not last; accountants, who have to make sense of impossible numbers with exquisite letterheads, pray it won't. So far, Baden Baden has managed to dodge the diatribe but with more and more multiyear deals and i dotting and t crossing activity being pushed further and further back, its time in the critical spotlight is coming.
A full Monte?
Every year, rumour has it that Monte will see fewer numbers and every year Monte proves the doubters wrong. Despite this year's predictable rumours, one of my contacts pointed out that although his company has been based in the Loews for several years, the hotel tried to coax them out, due to "unforeseen demand." My contact did not put up with this treatment, of course, but the situation speaks volumes, literally.
So what is Monte's appeal, besides the obvious? As I'm often told, although not a lot of underwriting is done, it is a great "networking opportunity". This is how the thinking goes: companies from all over the world go to Monte and it is so much more economic to meet them over a coffee in the Cafe de Paris - much to the chagrin of tourists - than travel far and wide. Here's how my thinking goes: if regulars cram in 20 meetings plus a day, how can you impress a current/prospective client in that time? Surely there cannot be much to say between bonjour and au revoir? I have put this to many attendees and they have all insisted that these mini-meetings allow them to "reinforce contacts" (sounds painful) and "get a handle" on client expectations and emerging trends.
Okay, so what topics are likely to be sounded out at this year's Monte? Consolidation, of course, is something nobody can get away from - how many people, I wonder, will recognise various faces at cocktail parties this year but have to resort to the badges everyone wears to put a company name to those faces - and catastrophe in the worst possible sense. The rest of the world may not agree, but the reinsurance market needs a big time catastrophe to turn the soft tide. With rates continuing to plummet, it looks like the only way to knock some underwriting sense back into the market.
"Networking opportunity" is as good a description of Monte as you will get. I have attended the Rendezvous many times over the last 10 years and have witnessed a great deal of networking in progress, usually in bars. It goes on elsewhere, of course, but this does not detract from the fact that there is a lot of bar work done. The Loews casino bar is a case in point. Some of the biggest talk is available in the smallest hours, despite the profusion of journalists, or perhaps because of it. Where better to start a rumour which may not show your competitor in the best light?
A cliche maybe, up there with the greats such as "cautiously optimistic," and "client orientated", but I always settle for the "networking opportunity" line when first-timers ask me what to expect at Monte. You certainly could not call it a conference. Every year the organisers trumpet their main presentation which, it has to be said, is usually of high quality with top notch speakers. It has to be said because few ever attend to find out for themselves. They are far too busy "networking" or recuperating from "networking" the night before. (Sorry, it's mainly we press that are known for that!) This year young (re)insurance professionals from Sensio Konsult, (Netherlands), Axa Re (France), and Crosby Asset Management (Hong Kong) will debate the future of the profession. Among the jury members are Kaj Ahlmann, chairman and ceo of Employers Re and Rudolph Kellenberger, member of the executive committee of Swiss Re. There is also a roundtable by the Association of Paris International Underwriters on the strengths and assets of local markets in a globalised insurance industry.
In its programme, the organising committee stresses in big, bold underlining that, "due to the exceptional nature of the presentations, participants are recommended to attend this conference." You have to hand it to them, they try.
The other thing I set first-timers straight on is the registration process. Over 2,000 delegates is a lot to get through and people tend to turn up in jumbo clumps. Queues are invariably long but the upside is that you can make great contacts here. Or is that just me? Anyway, once you are registered, the joys of the press in handout mode await upstairs. (Perhaps that isn't the right adjective; hungover is closer to the mark.) The reinsurance industry may be getting smaller, but the number of publications serving it are not. An accountant I have known for some years likes to call this whole process the "tunnel of death". It CAN get tough. I always feel sorry for the guys who have not come prepared (that is, sans sac) and who are too polite to turn down some of the publications thrust on them. They often arrive wobbling from jetlag. We send them off wobbling under the pressure of all those bumper Monte issues. But, as my accountant acquaintance points out, at least these piles can double up as a weapon if one's meeting isn't going too well.
Which brings us back to this "networking" milarkey. If you think all you have to do is turn up at Monte and you will meet lots of useful people, think again. Don't get me wrong. You WILL meet lots of people, but how useful they will be is another matter entirely. Most delegates have their Monte diaries pretty much sorted out by March, yes MARCH. You will be lucky to snaffle even a mini-meeting. And let's face it, there is not a lot you can say over a glass of champagne, a delicious thingy on a stick and an attendant spouse who has heard quite enough about reinsurance for one day, thankyou. The only business you are likely to pick up in this environment is of the card variety.
A word of warning here. Talking of delicious thingys, steer clear of anything served at the Hotel de Paris which purports to be chilli fish cake; mini, of course. My party took the plunge when the silver salver arrived and the conversation came to an abrupt halt. Orange juice suddenly became the preferred drink and a lot of air was coaxed into mouths. I came worst out of the situation. A reinsurance underwriter whom I had spent ages trying to track down finally made an approach and, for the first time in my life, speech was beyond me. By the time I had resumed my composure, my underwriter had disappeared into the twinkly, Ferrari-purring night that is Monte Carlo.
So where were we? Oh yes, first-timer pointers. Well, clothes are important, but not in the way you might think. By day, it is polo shirts, shorts and loafers, by night it is smart casual. First-timers are always a dead giveaway. They are the guy in the suit in the Cafe de Paris; the pariah stranded in a sea of crocodile logos. They are the guy at cocktail parties, draped in black suit and tie, who when attempting to infiltrate a cosy clique, has champagne glasses thrust in his face, demanding a top-up.
Added to this, there is just so much going on. Monte used to be a fairly low-key affair, but then the lawyers and the brokers and the consultants and everyone else moved in on the event. There was a time when the reinsurers mumbled about "vultures circling" but everyone seems to get on terribly well now. So much so that the Rendezvous organisers now call the event the "international meeting of insurers, reinsurers, brokers and reinsurance consultants."
The principality is also host to the International Circus Festival, but the Rendezvous isn't that far removed. Companies offer seminars, roundtables and client briefings all over the place. "Anything my competitors did last year, I can do better" appears to be the general consensus. DOITIS seems to have set in. When I asked some of this year's attendees if being seen in Monte is really what it is all about, most disagreed. Phrases such as "relationship recementing" popped up rather a lot (again, this sounds pretty painful to me) and there was much denying that one-up-manship rules. They can say what they want, but I beg to differ. I have listened to certain companies bragging about the amount of Monte-priced lobster they have treated their clients to. I have also listened to how much an average do costs. And where have I heard all this? In the Loews casino bar in the early hours, of course.
Baden Baden, on the other hand, remains the low-key affair it always was. There's the odd cocktail party, of course, but serious work is still done here, although not as much as before, thanks to later signings and multiyear deals. According to one of my contacts, proportional business is often placed at Baden Baden and ceding companies talk to their heart's content about future underwriting strategy. Basically, everyone is acting on Monte rumours - the ones to do with business that is - and deciding the shape of renewals to come.
I must admit, Baden Baden is my all-time favourite reinsurance location, not that reinsurers are going to want to hear this. All a journalist has to do is sit with an open ear in the lobby or bar of a Badischer Hof or Brenners Park Hotel, and there's enough material for a couple of months.
Heaven forbid, will video conferencing bring all this to an end? Unlikely, according to the reinsurers I have put this question to. I am reminded of the reaction I received some years ago when I dared to ask if EDI would destroy the face to face nature of the business. They smiled then and they are still smiling now. Reinsurance is staying real. Monte and Baden Baden will live on, despite the critics.
Valerie Denney is co-editor of this publication.