News Reinsurers should focus on
problems. Discussions between the two parties should take this form at this Baden-Baden meeting with reinsurers able to help in a number of ways. That is the view of James Vickers, chairman of Willis Re, speaking
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- sures facing insurers, both of which their reinsurance partners can help with. One is the lack of growth in their home markets while the other is how they bear the burden of costs and other distractions related to com- plying with Solvency II. “The focus should be on how reinsurers can help support their prima-
Vickers says. “They are facing a lack of growth within their own markets and they are under pressure from a regulatory point of view in the costs they’re incurring due to complying with Solvency II and all that entails. “In particular, reinsurers should consider they can help their primary clients take all of that predominantly compliance and regulatory related work, and use it in a way that can help them run their companies better.” He believes reinsures should do this by helping their clients consider and deal with their risks in a more holistic way. “Many companies are grappling with how they can link the risks that they’re writing to the capi- tal constraints and performance targets they have to and this, in turn, to some form of tangible reinsurance structure,” he says. “If you stop looking at the regulatory regime as regulation and start
looking at it as good ERM practice, you’ll see it is actually encouraging clients to look at their risks on a more holistic basis. The process is making companies look at risk in a different way, not just in silos, but in terms of how all risks affect the company’s balance sheet. “Once you start to think like that, the reinsurance solutions that work
within that environment tend to be a different. Reinsurers should try and support their clients in this. Yes, primary insurance companies will still a different mind-set and structure which requires reinsurers to show a He acknowledges this is not always an easy thing for reinsurers to do. He notes that the fact they are also a capital provider creates a tension while brokers are often seen as the natural advisers on such issues because they are neutral. neutral advisor. Brokers are helping clients develop these ideas and some reinsurers actively support brokers in this role. And this trend does not only apply to major insurance clients. This strategic approach is also be-
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einsurers should be less concerned about their own challenges and more interested in helping their clients – the insurers – solve their
helping cedants Reinsurers should worry less about their own problems and more about solving those of their clients, says James Vickers, chairman of Willis Re.
22.10.12 MONDAY
James Vickers, Willis Re But he admits that while he believes these are the issues reinsurers
theme. He believes that despite the wrangling, prices will remain stable in this year’s renewals. “The global reinsurance market’s having a good year. Losses are down and although investment income returns aren’t marvellous, provided there are no major losses it will be a strong year for the industry, Vickers says. “Capital is in reasonable shape and there’s more coming in to some of
- nies will be facing any increases in the cost of reinsurance overall, although I do suspect certain lines of business will be more pressured than others.”
Monday October 22 2012 | INTELLIGENT INSURER —BADEN-BADEN TODAY | 17
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