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“We embrace reinsurance” – Baden-Baden Mayor


The annual reinsurance meeting in Baden-Baden is an integral part of the city’s history, says Lord Mayor Wolfgang Gerstner.


T


he reinsurance community has been meeting in Baden-Baden annually


       German marine insurance sector, the event grew in the late part of that decade into one focused more on reinsurance. It has been an integral part of the city’s annual conference calendar ever since. As such, the city has embraced the reinsur- ance industry seeing the annual event as an in- tegral part of the city’s history. Wolfgang Ger- stner, the city’s mayor, says Baden-Baden has invested heavily in its ability to host such events over the years. “The city’s layout means Baden-Baden is


well suited to hosting such an event. Every year, the city’s many businesses focus on delivering their services to the many delegates who arrive, and we take great pride in having the event here,” says Gerstner. “The whole city always looks forward to hosting the annual Baden- Baden reinsurance meeting.” Gerstner says that while each Baden-Baden


reinsurance meeting is similar in terms of the or- ganisation required, he does acknowledge that each event is different in the dynamic within the reinsurance industry and the issues being discussed. “The different content means each meet-


ing each year is distinct,” Gerstner says. “Es- pecially in this sector, different themes emerge


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YOUR CONTACTS IN BADEN-BADEN John Walsh  Email: john.walsh@newtonmedia.co.uk


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PRODUCTION AND DESIGN Fisherman Creative


 Wolfgang Gerstner, Lord Mayor of Baden-Baden


each year depending on what is going on in the industry. Sometimes the debate is short term, sometimes long term but that makes the es- sence of this meeting.” Gerstner says his job is to ensure the city re- sponds to the needs of delegates in every way possible. Together with the Baden-Baden Health  founded a help desk and a special team able to respond at any time to delegate needs. “It is just in case people need additional meeting locations or facilities, for example,” he - vention centre, for example, that can be used at any time,” he says. 


Volatile opportunities – but beware of cat models (continued)


not always bad,” he said. “But it also has a price. Baden-Baden is famous for its casino and manag- ing volatility is the same. If you under price it, you will lose; if you over price it, you are out of business. Volatility is an opportunity but it needs to be priced correctly. And if it is ignored, it becomes a threat.” Kean Driscoll, the CEO of Validus Re,  volatility in the reinsurance industry. He argued that one of the biggest reasons  


 was using a similar model to price certain risks. When an entire industry becomes dependent


on a single model in this way, it becomes danger- ous, he said. He argued that what has occurred in the reinsurance industry with so many players basing their pricing of catastrophe risks on just a small number of catastrophe risk models. “We are relying too heavily on third party


vendors to manage and price our cat risks,” he said. “We see them as being the reality of how


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


that risk should be priced. But little original re- search is done by the reinsurance industry any more to delve into these risks deeper.” He said that Validus Re has invested heavily in doing this but other companies must do the same. “These models have huge value if used correctly but we saw the implications of relying on just a  “To me, with all reinsurers are pricing these risks in the same way it introduces a potential level of volatility that is unacceptable. We must invest in understanding these risks and build this investment into pricing.” 


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