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Renewed Resolve Among Reinsurers

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BADEN-BADEN REPORTER DAY 1: MONDAY OCTOBER 21 2019 Let DATA and ANALYTICS GROW your business Renewed resolve among reinsurers ositive market sentiment in Monte Carlo bodes well for renewal Pdiscussions in Baden-Baden this Cyber risk accumulation is week, according to Michael Pickel, “a big concern for insurers board member at Hannover Re. and there’s growing “At Monte Carlo the consensus among brokers and reinsurers was for an at interest in the potential least stable renewal, with increases in for cyber catastrophe rates and terms and conditions. The protection. Many industrial impetus is coming from the North carriers are writing big American primary market, where there is sustained hardening,” Pickel told volumes of standalone Reactions. cyber insurance and they Recent loss activity also added to need to resolve the issue of momentum. “Loss activity related to Hurricane accumulation.” Dorian and Typhoon Faixi in Japan Michael Pickel, Hannover Re has really strengthened the reinsurance market’s resolve. In Germany, storms including a damaging hailstorm that “An improvement in the market is hit Bavaria in June caused considerable urgently needed because everyone damage to cars and property, adding to is under pressure now. If there is an a tightening of capacity for European improvement in industrial fire business cat reinsurance,” Pickel said. then we will be a willing reinsurance Pickel expressed surprise, however, partner,” Pickel promised. that there was little talk in Monte Hannover Re’s focus in Germany is on Carlo about the effect of low/negative reinsurance of motor and also long tail interest rates on the next renewal. particularly on the property side and business. “This will especially have an impact many of the major players are more “In motor, 2019 will likely see a on all segments of long tail business. focussed on improving their portfolios. combined ratio of less than 100. But PC companies will soon start to feel The big German players especially want it’s clear that a fight for market share the effects of low interest rates in their to have a more stable portfolio and that among primary insurers is going to balance sheets and particularly their will drive the quality of the renewal,” intensify following Allianz launch of a reserves,” he said he said. new online platform,” Pickel predicts. Pickel, who is also CEO of E+S Rück, “At a recent buyers’ conference in “Rates won’t rise and will be further the subsidiary responsible for Hannover Germany, speakers were warning suppressed by ‘no-claims’ discounts Re’s business in Germany, wants to over the potential for rate increase, from this year. So a reduction in see more action on industrial lines in demonstrating that insurers have premium volume and more expensive Germany. expressed their intent to hold the line or claims will push the market over 100 “Industrial business needs more rate, to cancel business. Continued on page 3 BADEN-BADEN REPORTER: MONDAY OCTOBER 21 2019 www.reactionsnet.com | 1 Focus. At Markel, strategy and execution are equally important. We are mindful of the big picture, and we are relentless when it comes to process improvement, technology deployment, and strengthening relationships. Paying attention to details . that’s the Markel Style. markelcorp.com MONDAY You say you want a revolution… Contents Renewed resolve among einsurance executives reinsurers .............1 arriving in Baden-Baden Ryesterday were presented with a “do or die” warning over disruption of their industry. The question posed to speakers for the meeting’s opening symposium, Is the (re)insurance sector ready for Industry 4.0? Fac is changing met with the answer, it doesn’t track .....................4 have a choice. Making sense of a In his introduction, Guy market in flux ........6 Carpenter’s James Nash said that UK insurers to take profit hit: Fitch ......8 robotics and AI will revolutionise Guy Carpenter’s James Nash (l) leads the panel debate on disruption what and how risks are underwritten, with risk data being a tipping point when change Jon Hancock pointed out that made available to underwriters is unavoidable and she agreed the third industrial revolution in real time. “It will lead to a that technology is a catalyst. She had passed unnoticed by refocussing of our industry from warned that revolution would be the industry. He said that London company loss indemnification to loss “unkind” to industry incumbents replenishing the sector’s talent premiums grow by 8.1% – IUA ............8 prevention.” and that data standardisation is base is now essential to prepare RMS CEO Karen White said essential insulation. for the future, adding that, “If Cedants call for proportionate that all industries eventually reach Lloyd’s director of performance Lloyd’s can do it, anyone can.” l pricing .................9 Continued from page 1 share is actually quite small risk accumulation protection combined [ratio]. It follows considering it is the second coverage.” that rates in non-proportional largest property-casualty In a further development, reinsurance business will have to reinsurer in the market. Hannover Re is expanding in rise and that we will be careful Cyber risk is another line individual coverage concepts Reinsurers playing on commission rates in the 2020 earmarked for expansion. for clients. “Hannover Re has catch up on pricing ...............10 underwriting year,” he warned. “Cyber risk accumulation is a developed structured reinsurance Pointing to possible growth big concern for insurers and solutions aimed at providing Tough times for Turkish market ahead .....12 areas for Hannover Re, Pickel there’s growing interest in the large insurers with solvency said he sees opportunities to help potential for cyber catastrophe relief over set time periods. It is a MS Amlin to exit nine business lines .....12 primary carriers with reinsurance protection. Many industrial growing business and has about coverage for their legal expense carriers are writing big volumes €2.5bn premium income,” Pickel Third-party liability compensation of insurance business and that the of standalone cyber insurance said. “Capital relief is important severe motor bodily company has developed tailor and they need to resolve to big insurers who want to injury claims in made stop loss reinsurance the issue of accumulation,” protect their financial strength France ................13 structures for this line. Pickel told Reactions. “In rating. But reducing volatility IFRS 17 means extra He said that Hannover Re response to enquiries from is also crucial when it comes work – Willis .......14 could write more property cat clients, Hannover Re is in the to continuity with shareholder More extreme sea level business in Germany as its process of developing a cyber divided payments.” l events to come ...14 Editor-in-Chief Publisher Sales Manager Annual subscription rates: Customer services: Shawn Moynihan Goran Pandzic Patrick McCulloch Corporate multi-user rates are available, +44 (0)20 7779 8610 +1 212-224-3474 +1 212-224-3711 +44 (0)28 95912905 please contact Reactions (ISSN No. 002-263) is an online [email protected] [email protected] [email protected] [email protected] information service supported by a print Single user: £1,092 / $1,837.50 / €1,485 magazine published by Euromoney Baden-Baden Editor Head of Programming & Events Design & Production Institutional Investor PLC. Garry Booth Elizabeth Wu Tina Eldred Subscription hotline: ©Euromoney Institutional Investor PLC + 44 7951 777022 +1 212-224-3713 [email protected] London: +44 (0)20 7779 8999 London 2019. Although Euromoney [email protected] [email protected] New York: +1 212 224 3570 Institutional Investor PLC has made Divisional Director every effort to ensure the accuracy of this Jeff Davis London Editor Events Coordinator Back issues: publication, neither it nor any contributor can Mark Richardson Stuart Uffner +44 (0)20 7779 8999 accept any legal responsibility whatsoever +44 7920 098199 +1-212-224-3712 Printing: Druckhaus Spath, Baden-Baden Subscribers: £27.50; for consequences that may arise from errors [email protected] [email protected] Non-subscribers: £45.00 or omissions or any opinions or advice Reactions: ISSN 0953-5640 given. This publication is not a substitute for 8 Bouverie Street, London EC4Y 8AX, UK professional advice on a specific transaction BADEN-BADEN REPORTER: MONDAY OCTOBER 21 2019 www.reactionsnet.com | 3 MONDAY Fac is changing track Laure Forgeron, head of P&C facultative EMEA at Swiss Re, explains how facultative reinsurance is becoming a more strategic purchase. Tell us about the current trends change in risk appetite that occurs at impacting direct & facultative (D&F) short notice. pricing and capacity? The picture for property fac business What growth areas are you seeing? is still mixed but we see strong signs Due to portfolio de-risking actions and of hardening in most markets. The capacity, we see a strong increase in hardening trend is much stronger in demand for facultative cover. property, but in casualty classes we’re We are receiving increased requests also expecting overall flat to increased for strategic fac facilities to help manage rates. The market where we observe the and reduce the volatility within insurers’ most hardening is UK and international portfolios. The second is around business, Germany and Benelux, but innovation, with demand for new types now we’re also seeing it in other regions. of products covering new exposures, What we observe in The price development is driven by such as non-damage BI, cyber, “fac is that the cycle is several factors, including losses and parametric covers, bundled fac business not dead and insurers underperforming segments (heavy and other, more complex solutions. occupancies), which require some We also see opportunities to support are reviewing their correction. We have also seen the our clients as they enter new markets underwriting strategy withdrawal or de-risking of large players and begin underwriting new types of and reducing capacity.
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    Half-yearly Financial Report 2021 Key figures in EUR million 2021 2020 1.1. – 1.4. – +/– 1.1. – +/– 1.4. – 1.1. – 31.12. 1 31.3. 1 30.6. previous 30.6. previous 30.6. 30.6. year year Results Gross written premium 7,809.3 6,655.3 +7.9% 14,464.6 +10.0% 6,170.8 13,146.1 Net premium earned 5,692.7 5,822.6 +10.1% 11,515.3 +11.0% 5,287.2 10,378.1 Net underwriting result 2 25.4 98.9 124.3 (285.5) (330.4) Net investment income 441.1 424.7 +32.1% 865.8 +9.2% 321.4 793.1 Operating profit (EBIT) 403.8 552.3 956.1 +89.9% 76.9 503.5 Group net income 305.9 364.7 670.6 +66.7% 101.5 402.4 Balance sheet Policyholders’ surplus 14,822.2 14,859.2 +5.6% 13,715.1 14,071.0 Equity attributable to share- holders of Hannover Rück SE 11,043.0 11,050.6 +0.5% 10,687.7 10,995.0 Non-controlling interests 803.3 831.7 -1.5% 791.6 844.4 Hybrid capital 2,976.0 2,976.9 +33.4% 2,235.8 2,231.6 Investments (excl. funds withheld by ceding companies) 52,282.9 52,847.7 +7.8% 48,768.1 49,001.6 Total assets 77,038.8 78,099.2 +9.3% 73,307.1 71,437.5 Share Earnings per share (basic and diluted) in EUR 2.54 3.02 5.56 +66.7% 0.84 3.34 Book value per share in EUR 91.57 91.63 +0.5% 88.62 91.17 Share price at the end of the period in EUR 155.80 141.10 -8.0% 153.40 130.30 Market capitalisation at the end of the period 18,789.0 17,016.3 -8.0% 18,499.6 15,713.8 Ratios Combined ratio (property and casualty reinsurance) 2 96.2% 95.7% 96.0% 104.8% 102.3% Large losses as percentage of net premium earned (property and casualty reinsurance) 3 5.0% 3.3% 4.2% 12.8% 10.7% Retention 91.5% 89.2% 90.4% 90.4% 90.8% Return on investment (excl.
  • The Global Risk Landscape After COVID-19: What Role for Insurance?

    The Global Risk Landscape After COVID-19: What Role for Insurance?

    The global risk landscape after COVID-19: What role for insurance? The global risk landscape after COVID-19: What role for insurance? Kai-Uwe Schanz, Deputy Managing Director and Head of Research & Foresight, The Geneva Association Acknowledgements Our many thanks to all the experts whose comments and contributions have benefited this publication: Edward Barron (AIG), Paul DiPaola (AIG), Kean Driscoll (AIG), Andreas Funke (Allianz), Maryam Golnaraghi, Gong Xinyu (PICC), Arne Holzhausen (Allianz), Kei Kato (Tokio Marine Holdings), Christian Kraut (Munich Re), Roman Lechner (Swiss Re), Ivo Menzinger (Swiss Re), Cameron Murray (Lloyd’s of London), Guillaume Ominetti (SCOR), Gisela Plassmann (ERGO), Olivier Poissonneau (AXA), Veronica Scotti (Swiss Re) and Lutz Wilhelmy (Swiss Re). The Geneva Association is very grateful to the following executives and academic experts who shared their perspectives through in-depth interviews: / Oliver Bäte, CEO, Allianz / Mark J. Browne, Professor and Chair of the Faculty of Risk Management, Insurance and Actuarial Science, Tobin College of Business at St John's University / Brian Duperreault, Executive Chair of the Board, AIG / Jan-Hendrik Erasmus, Chief Risk Officer, Aviva / Renaud Guidée, Chief Risk Officer, AXA / Jerome Haegeli, Chief Economist, Swiss Re / Jean-Jacques Henchoz, CEO, Hannover Re / Ekhosuehi Iyahen, Secretary General, Insurance Development Forum (IDF) / Paula Jarzabkowski, Professor of Strategic Management, The Business School (formerly Cass), City, University of London / JIANG Xing, CEO, ZhongAn Online P&C Insurance / Denis Kessler, Chairman & CEO, SCOR / LUO Xi, Chairman, People's Insurance Company of China (PICC) / Michael Menhart, Chief Economist, Munich Re / Tsuyoshi Nagano, Chairman of the Board, Tokio Marine / Eduardo Pérez de Lema, Chairman & CEO, MAPFRE RE / Richard Peter, Associate Professor of Finance, The Emmett J.