Johannes Hartmann, VIG Re
Cat losses and the role of local knowledge
How much rates may rise in the aftermath of big cat losses is a major concern of
delegates in Baden-Baden, Johannes Hartmann, chief executive of VIG Re, tells
Baden-Baden Today, as he also explains the reinsurer’s commitment to Europe.
Conversations at Baden-Baden this year
are focusing on how much recent cat
losses will affect rates in Europe, with a second
underlying topic of technological innovation
within the industry, according to VIG Re’s
CEO Johannes Hartmann.
“There is a focus on topics such as insurtech
and to what extent the industry is reinventing
itself to cope with challenges,” he says.
Regarding the impact of the cat losses, key
players are still holding their cards close to their
chests, he says.
“It’s like a poker game. Everyone
acknowledges it was a massive earnings event
for reinsurers. No reinsurer claims that it is a
capital issue for himself but we know there are
ones that have had a blow on their capital and
will have to recapitalise.
“There is also a lot of discussion about what
will happen in the retro market and how much
alternative capital such as insurance-linked
securities (ILS) is prepared to reinvest.”
Discussing VIG Re’s recently opened
office in Germany, Hartmann says the office
underlines the company’s commitment to the
region, and that VIG Re has been able to
gather German clients much more quickly than
had been expected, not least because VIG Re
suits the traditional tastes of the industry there.
“You can see a very clear preference
from clients to partner with more traditional
European providers. In addition, around
30 percent of our non-VIG business is now
coming from the German market,” he says.
Since February VIG Re has had a new
strategy in place which fits the group’s
philosophy of being more diversified than
“We are very much involved in creating
additional value for local companies,
supporting them in their growth initiatives,”
He adds that VIG Re’s strong position as
a specialist reinsurer in central and eastern
Europe is built on similar qualities to those that
underpin its success in Germany:
“If you do the analytics we are clearly
outperforming our competitors. The reason for
that is twofold: we know the local market so if
there is an issue with the regulator, for example,
we would know that already from our insurance
companies and we can address it much faster.
“Second, we are operating on a low-cost
basis whereas other reinsurers have trouble
because their internal costs are too high. We
are very familiar with the business culture in
the region,” he explains.
VIG Re now has more than 300 clients in
the region and this high market penetration
means that while some growth opportunities
still exist, they are becoming fewer.
“It’s harder now for us to find new clients
in the region because either we have threats to
overcome—such as we are perceived as a key
competitor—or there is a reason we do not
want to do business with them—such as they
are companies that we believe don’t have a
This has led VIG Re to work towards
“This was the biggest switch for us,” says
Hartmann. “Before, we had a commitment
to operate only in markets where we also
have primary insurers, because of the market
intelligence that brought us.
“We believe we can work in western Europe
with the very successful market model we have
in Germany, but our challenge is that we still
have to build up our market intelligence to be
closer to the market.
“We have hired Patrick Chevrel from
PartnerRe to lead our western European
“He will head the company’s newly
established underwriting team in western
Europe to develop the business with clients in
France, Belgium and Luxembourg,” he explains.
“At PartnerRe Patrick most recently served
as the head of global accounts. Previously, he
served as head of France/Benelux P&C until
2010, and head of specialty property lines
Chevrel’s appointment will help drive
forward VIG Re’s growth in the region across
all lines of business including property, motor,
liability and engineering, and Hartmann
expects that his wealth of experience of the
French and international reinsurance markets
will provide the “closer to the ground”
knowledge required to give VIG Re strength in
Within western Europe the company will
focus on mutual insurance companies, and also
on business that is cost-sensitive.
“We will also look to use VIG Re as an
enabler or gateway to bring collaborations
between those clients and other companies,
because if you are a small mutual you
sometimes don’t have critical resources in
specific areas—we can help with that,”
Hartmann concludes. n
“You can see a very clear
preference from clients to
partner with more traditional
4 | BADEN-BADEN TODAY | DAY 3: Wednesday October 25 2017 www.intelligentinsurer.com | www.bermudareinsurancemagazine.com