NewRe sees benefits from M&A
Artur Klinger, chief underwriting
officer at the more than 90-year-old
NewRe, told Monte Carlo Today that
more companies are recognising the value of
reinsurance once again.
He explained that the reinsurer, which
became part of the Munich Re group in the
1980s, is looking to benefit from changing
markets as part of its strategy for treaties
and P&C as there’s a lot of mergers and
acquisitions (M&A) going on.
“No-one will buy us and our shareholder
won’t sell us, so we’re very stable, which makes
us a good partner for treaties. Insurance
companies want to move risk off their balance
sheet, so we do retroactive solutions. And we
give protection from volatility to the balance
sheets,” Klinger said.
He said the retroactive area of business
“seems to be a topic of conversation at Monte
“Unlike the last 10 years, when there was a
trend to cede less premium to the reinsurance
market because companies wanted to keep
the premium and not sell it to the market,
this seems to be changing.
“More companies are seeing the value of
reinsurance again. Reinsurance stabilises
their results, it helps them manage some
liabilities, and that’s where we come into play.
We really expect that the volumes ceded to
reinsurance will increase,” he said.
Demand is back due to uncertainties
such as climate change and geopolitical
instability around the globe. As well as this,
NewRe’s clients have more pressure on the
cost side because they are moving towards
digitisation—they need to invest a lot and
increase their costs to be fit for the digital
At the same time they face all the risks of
political and climate change, and this might
give additional volatility to the balance sheet,
as well as M&A.
Klinger added: “In the last 30 years, the
market has behaved more rationally. That
means that you need to provide value on the
standard products and some areas where
prices might increase based on the recent loss
experience, in the US mainly.
“In other areas you probably have less of
a price increase, perhaps some selected price
“Price increases are always good, but
NewRe is a lean company, so we always find
ways to make business,” he concluded. l
Loss reporting essential to fast-changing cat picture
In recent years the industry has been
experiencing big losses from unexpected
perils, Tom Johansmeyer, assistant vice
president–PCS strategy and development at
ISO Claims Analytics, told Monte Carlo Today.
These events have included terror attacks,
hailstorms and wildfires. As a loss reporter
providing an independent view of cat losses,
PCS has seen its record-breaking events
regularly get trumped by new ones.
“For the past few years we have been trying
to see and understand the big losses that are
coming from perils that no-one expected,”
“In 2016 it was the Fort McMurray wildfire
in Canada. That became the biggest insured
loss for wildfire on record in PCS for the US or
Canada, and we started telling our clients they
needed to think about wildfire as a potentially
bigger risk than they realised.
“Fort McMurray is now the fifth largest
wildfire on record in PCS. Previously it was an
absolute rarity to see a tornado hail event over
$1 billion—now we’ve seen a run of several at
$2 or $3 billion, which could start to threaten
Since Johansmeyer took over PCS three
years ago, its reach has grown dramatically.
Initially focused on the US, it expanded
to cover Canada in 2009. Johansmeyer
completed its expansion into Turkey and has
also taken it into Japan and Mexico.
“New Zealand, Australia and Latin America
are areas we are now actively investigating,” he
said, adding that he is pleased to be keeping
up the pace.
“Loss reporting is often seen as a slow,
stable and retrospective activity,” he said.
“That doesn’t mean a loss reporting agency
should be slow in all things—your operation
should be deliberate and methodical but still
“You need to be able to move fast and
effectively into new markets because if clients
want to manage their risk, they need the tools
to do it.”
Monte Carlo Today Day 4 Wednesday September 11 2019
He adds that the demand for PCS’s
products is reflected by the eagerness of
clients to sign up to them.
“If we are doing everything right we should
have products that people want and need and
are willing to mobilise for—and that’s what
we are seeing,” he concluded. l