Bermuda Re/insurance Roundtables
“In emerging markets we would prefer to be closer to the ultimate
client in order to have greater visibility of
what’s happening in that market.”
capital will flow to traditional reinsurers with a strategy within the managed capital space. There’s enough room to go around for both the independents and the allied strategy, but the alliance strategy will, over time, win out on a greater percentage of agreements. That’s a better strategy in the long run because it puts capital in fewer hands and allows for more control over the deployment of capital and more control in terms of price and volatility in the market.
Cooper: I tend to agree with that, because one of the things that we as
traditional reinsurers bring is expertise. We’ve been writing the business for years and we get that the model is a tool and it helps you underwrite, but that at the same time you have to think outside the box.
Few: Traditional reinsurers also have a long track record of being trading partners, which I think a lot of buyers care about. We’re less heavy in the cat world than some Bermuda players, but we look to build relationships across all lines and build a trading relationship that is mutually beneficial. It is not quite the same in-and-out type philosophy of a pure cat player. There is a part of the market that appreciates that and enjoys trading on that basis, but there is some value to the longer-term view of building business relationships. Traditional players can bring a lot to the party.
Becker: I would also say you’ve got much better visibility on deal
flow. Traditional players are in the market every day, in a variety of places, and you’ve got much better insight into what the markets are doing.
Is an allied strategy the means to get involved in the alternative space without damaging your traditional offering?
Driscoll: We strongly believe that it is the right approach. Other
traditional reinsurers have entered the space in a non-allied strategy so just as there’s a diverse approach to targeting traditional rated reinsurance in this room and globally, you’re going to see the same thing in the third party capital space. Our view is that we think over time more of the money will end up in the allied space.
Zurich has proved to be a popular centre for companies looking to build out their European operations. What are your thoughts on other global centres and what do you think are the prerequisites, from both a jurisdictional and market perspective, for the creation of a successful regional hub for insurance and reinsurance?
Becker: The answer is different for insurance and reinsurance. Insurance by nature is a much more local product, so more geographic
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