News


n the face of intense and multifaceted market pressures, underwriters must retain


their integrity and good judgement at all costs, Matthias Weber, group chief underwriting officer, Swiss Re, told Monte Carlo Today. He


also admitted that the intense


competition has forced Swiss Re to reduce the amount of transactional business it writes in favour of larger, more complex deals—a move he believes proves that tough market conditions can drive innovation. “One big challenge that underwriters are


experiencing is that sometimes judgement can be influenced by market pressure,” Weber said. “Underwriting is a combination of art and science—and I would add the word ‘integrity’. Integrity in the sense of being objective when it comes to assessing the economic attractiveness of individual deals. This is important as— besides all the models—there is also a large level of judgement involved. “Compared to two years ago, companies and underwriters are now challenged


to


13.09.15 SUNDAY


Risk selection drives innovation at Swiss Re I


no longer cover the cost of capital—making good risk selection and integrity increasingly important. This is driving innovation in reinsurers. “In


2015, we reduced our traditional transactional business due to price pressure, but we have been able to compensate this with large and tailored transactions, each of which required a good amount of innovation,” he said. “Large


tailored transactions are not Matthias Weber


perform cycle management and good risk selection, and deal with softening terms and conditions in an appropriate way.” He added that the soft market has become so extreme in some segments that price levels


commodity business and less exposed to price pressure. As a result of the softening market, we were forced to innovate to be different from others. Innovation led to differentiation which is key to success.” Looking to the future, Weber said that


understanding future changes in the reinsurance landscape is increasingly important. “There are several themes that matter in the


long term and are strategically more important. This includes tackling the


protection gap,


embracing new technologies, making cyber risk insurable or dealing with casualty risk,” he said. n


Leaving EU ‘would damage London Market’s reputation’ I


n a recent survey by Intelligent Insurer, 70 percent of respondents said that a UK


referendum in favour of leaving the European Union (EU) would damage London’s role as a global hub for re/insurance and risk transfer. “It would have a negative impact on the willingness of London to deal with European clients,” said one respondent. Another added: “It would encourage


parochialism and local interest within the EU and a lessening of common legal structures and rights.” Many others felt


strongly about


focus from such previously identified issues,” said one person. Another said: “Lloyd’s and the London


Market is developed on the basis of reputation. Leaving the EU would encourage Dublin, Paris, Lisbon, Berlin, etc, to ‘take on’ the UK and marketing would include common currency, legislation, and language.” However, 30 percent did not agree. “Reinsurance always has been and always


the


detrimental impact of leaving the UK, for reasons such as some EU members relying on a re/insurance market inside the EU rather than on a non-member’s capabilities and an increase in ‘paperwork’. “London is already under pressure from local ‘hubs’ around the world. By leaving the EU, a further negative light could be projected onto the London market. This would need to be addressed in addition to the concerns already highlighted in the recent London Matters report. This, in turn, could detract


will be a global commodity driven by the needs and requirements of buyers and providers—there will be instances where reinsurers may need and/or choose to set up branch operations in Europe (if they don’t have them already) in order to comply with certain European regulators that have interpreted the EU reinsurance


protocol


differently from other EU countries,” said one respondent. Another added: “Allowing the UK to its own economic policy more


manage


comprehensively will allow the government to more effectively dictate the terms it offers to all business sectors.” n


16 | MONTE CARLO TODAY | DAY 1: Sunday September 13 2015 www.intelligentinsurer.com | www.bermudareinsurancemagazine.com


Would a UK referendum in favour of leaving the European Union (EU)


damage London’s role as a global hub for re/insurance and risk transfer?


Yes—70% No—30%


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