News
Tokio Millennium targets Europe
Few reinsurers are expanding as aggressively as Tokio Millennium Re. The company’s chief executive explains its European ambitions.
T
he European market is notoriously difficult to crack, with many cedants preferring to place their business exclusively with companies
with a physical presence in Europe. But this is exactly why ambitious Tokio Millennium Re has opened a new office in Zurich – something they are keen to communicate to cedants at this year’s Baden-Baden meeting. “We want to let everyone know about our new Zurich office and to in-
troduce our chief executive, Stephan Ruoff, who came to us from Munich Re,” says Tokio Millennium Re chief executive Tatsuhiko Hoshina. “As part of this initiative, we will be having a cocktail party at Baden-Baden which will allow us to begin building relationships with key players in the market.” Hoshina believes some of the characteristics which make the Euro-
pean market difficult to gain a foothold in are also the things that make it attractive to reinsurers. “The European market is not easy to penetrate; you need patience,” he says. “Cedants have strong relationships with their
Tatsuhiko Hoshina, Tokio Millennium Re
reinsurers and they are used to dealing with a certain panel of reinsurers which they will have worked with for many years. “Hopefully, the introduction of Solvency II will increase demand for
reinsurance, especially on catastrophe programmes. We have one of the highest ratings in the world and this will be advantageous as we gradually position ourselves in the market. “We already have a number of European clients who work with our
Bermuda office on our cat programmes, but there are still a number of companies who only place business in the European market. We want to access that business. We want to be closer to the clients, providing them with more products.” He adds that as well as expanding its geographical scope, the company
is now growing its product portfolio. In addition to writing cat business, the company is now entering the non-cat arena where it has started writ- ing casualty business as well. Hoshina believes that one of the main themes at Baden-Baden this
year will be the introduction of RMS’s new European windstorm model. “It will be interesting to see how many cedants and reinsurers incorporate it into their pricing,” he says. He adds that Tokio Millennium Re is well placed to absorb any changes to the model due to investments it has made in keeping abreast of such developments. “The release of the new model will have an impact on the quantifica-
tion of risks and will impact loss ratios and pure rates. However, because we’re ahead of the game, the impact on us will not be as large compared with those who have only just introduced Version 11 or who use RMS exclusively as their modelling tool.” Given the intense catastrophe activity throughout 2011, Hoshina be-
lieves that rate increases might occur in Europe, but not on the same scale as in other parts of the world where there have been direct losses. “On the catastrophe side, people will be discussing the direction that
the market is heading – is it going up or is it staying flat?” he says. “Based on loss frequency this year, we think there will be an increase of between five and ten percent in the US, while in the European market we antici- pate rate increases from flat to five percent. We don’t think rates will be going down, that’s for sure.” He adds that as well as its tangible expansion in terms of geographi-
cal reach and products, it is also investing heavily in internal systems that allow it a better handle on risks. “We have always been a company that values information technology and we strive to uncover tools that we can trust. Hopefully this will help to prepare us for the 2012 renewal season.”
www.intelligentinsurer.com
25.10.11 TUESDAY
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