Reinsurance rate rises drive interest in alternative solutions
Reinsurance market conditions are driving increased interest in alternative capital and structures to meet risk requirements, a symposium at the Baden-Baden industry gathering has heard.
Scor CEO Thierry Leger told the symposium that alternative structures had become a core component of the reinsurer’s approach and a key part of its strategic plan, as it tailors solutions to client needs.
“We can build on decades of experience, data and client relationships,” he said. “We also develop long-term risk partnerships with alternative capital providers in SCOR overall retrocession.”
PGGM Lead Portfolio Manager, Insurance Linked Investments Eveline Takken-Somers says alternative capital is embedded into the reinsurance industry, has grown to a significant size and level of importance and will continue to grow if certain conditions are met.
“Firstly, there needs to be sufficient alignment with traditional capital so that investors are not having to take on risks that the industry is not willing to take on,” she told the event.
“Secondly, alternative capital needs to achieve sustainable returns. In recent years, like traditional capital, return objectives for alternative capital have not been met.”
Lloyd’s CFO Burkhard Keese said the London Bridge 2 vehicle, which was approved by regulators and established last year, had enhanced the market’s accessibility to the investment community.
They symposium was hosted by Marsh McLennan reinsurance broker Guy Carpenter.
“In today’s world, it’s imperative that we establish clear alignment between all market stakeholders,” Guy Carpenter CEO of Europe, Middle East and Africa and Global Capital Solutions Laurent Rousseau said. “We must always ensure that we deliver value for insurers and their insureds.”
The annual reinsurance gathering in Germany involves meetings and discussions organised by participants ahead of the January renewals.