Over the next few years, NewRe, a wholly owned subsidiary of Munich Re, is committed to consistent underwriting and the establishment of strong partnerships across Europe.
This is according to Artur Klinger, Chief Underwriting Officer (CUO) Property & Casualty at NewRe, who recently met with Reinsurance News to discuss the firm’s targets over the coming years, as well as current reinsurance market dynamics.
To start, Klinger explained that NewRe’s business model is not built around targeting growth.
“First priority remains consistent underwriting and creating strong partnerships across Europe. NewRe will drive its aim of being a stable partner for its European clients. With Munich Re as shareholder we have achieved an impressive track record of profitable growth during the last decade with underwriting at the core of our business model,” said Klinger.
He continued to explain that NewRe has a focus on its core competency, which is underwriting and risk management.
“By further developing the transactional business model, NewRe continues to be a predictable partner giving brokers and clients direct access to its decision makers. This -together with the long term commitment- is the basis for sustained success in an ever changing market environment,” he said.
As noted by Klinger, the reinsurance market is constantly changing and remains an extremely competitive industry.
Discussing the non-life space, Klinger explained that price increases are evident mostly in loss-affected areas in North America and Japan which were hit hard by catastrophe events in both 2017 and 2018.
“Across the globe, insurers are demonstrating rational reinsurance buying behaviour, purchasing best value for money. Capital relief and capacity are no more the only drivers of reinsurance value add. We observe that protection against earnings volatility and the quality of the panels plays a more important role going forward,” he said.
Regarding the non-life space, Klinger explained that the best growth prospects for its portfolio includes customised solutions that protect its clients earnings to meet shareholder expectations, capital relief solutions and increasingly, a number of liability classes across Europe.
In 2018, NewRe’s life reinsurance business grew much faster than its non-life business, and Klinger provided some insight into why this happened.
“For the past years, active capital and risk management have become increasingly important for life insurance companies. NewRe addresses such needs by providing risk management solutions for life insurers worldwide.
“Our life book has therefore grown significantly to include reinsurance for variable annuities, immediate and contingent financing contracts, traditional and extreme mortality covers, and capital relief transactions covering lapse, mortality and financial market risks.
“In 2018, our growth in life was mainly driven by significant worldwide opportunities that NewRe was fortunate to seize.”
Overall, Klinger said that the reinsurer is experiencing continued strong demand for customised life solutions globally, driven by more sophisticated regulatory environments.
Looking forward to the 2020 January renewals season, Klinger said, “I believe it is fair to say that we are continuing to write business in a ultra-competitive environment which will obviously always have an effect on the renewals. A slight adjustment of pricing can be observed yet insurer will surely be buying best value for money.”
