Munich Re builds APAC footprint
Munich Re’s Asia-Pacific business
is “strengthening and fostering
local operations” by giving offices
in the region “stronger mandates”, according
to Tobias Farny, chief executive, Asia-Pacific
for Munich Re.
He told Monte Carlo Today that in the
Asian markets business is good but remains
“We’ve been successful in establishing the
Asian operations, we sit on good portfolios
of business that produce decent results. But
we have volatility, be it from nat cat or other
areas,” Farny said.
He added the business had seen price
deterioration between 2012 and 2018 as
prices came down.
“There was a negative trend in the sense
we felt prices were not always adequate.
For the last 12 to 18 months, things have
stabilised, which is good. Prices are subject
to the function of supply and demand, so we
still see room for prices to improve further in
areas where, simply because of the last couple
of years, they have been trending downwards
for too long,” he said.
Explaining the company’s plans to build
the Asia-Pacific business, Farny said: “What
is important to us, and that’s where we have
developed the company’s Asian operations, is
to strengthen and foster the local operations.
“Over the last two years, we’ve been
Monte Carlo Today Day 4 Wednesday September 11 2019
building and enabling the offices abroad with
stronger mandates. We’ve moved a couple
of the responsibilities into the region, for
“We’ve built a cyber hub in Singapore, and
we’ve strengthened our agricultural business
team, especially in India and China, because
we see these markets are very large agricultural
markets and we realise the necessity to make
“They will always be based on good
knowledge, so that is where we currently
He added that on the basis of strengthening
the local footprint in the market, he is looking
at a number of new areas, for example cyber.
“It is a global phenomenon that’s also true
Farny highlighted the launch of Munich
Re’s Smart Thinking company in Beijing,
which offers a consultative approach.
“We hired data analysts, IT specialists
and people from digital backgrounds so that
we have someone our clients, the primary
insurance industry, can talk to, to build
digital sales channels, etc,” he concluded. l
Cat bonds can meet Silk Road need: PhoenixCRetro
There is a potentially big opportunity
for the insurance-linked securities
(ILS) markets to develop parametric
cat bonds that could cover some of the
growing risks in Eastern Europe and Western
areas of Asia, according to Kirill Savrassov,
chief executive of PhoenixCRetro.
Savrassov told Monte Carlo Today that for
a wide range of historical reasons insurance
penetration remains very low in various
countries of the former Soviet Union, as well as
Turkey and parts of former Yugoslavia. Those
areas are highly vulnerable to earthquakes,
such as the ones that devastated Armenia and
Tashkent over the past 50 years.
Savrassov pointed out that a huge amount
of investment is being poured into the region
by the Chinese government, which is seeking
to expand its economic footprint with its Belt
and Road Initiative, an economic project to
essentially recreate the ancient Silk Road that
linked Europe to Asia.
This requires the creation of a huge of
amount of infrastructure, such as roads,
railways, bridges and warehouses, as well as
living quarters for local workers. All of these
would very vulnerable to a major earthquake,
not to mention the losses that could be
caused by business interruption costs.
“Private markets have the solution to
this, in the form of parametric cat bonds,”
said Savrassov. “This is a classic win-win
partnership and it’s very much the future of
the development of the ILS class.
“It’s in the interests not just of investors
or ILS fund managers, but in the interests
of international agencies and financial
institutions such as the UN Development
Programme and the Asian Development
Bank, as well as the general area.
“To give an example of the scale of the
vulnerability, the Belt and Road scheme has
not yet been completed, but 10,000+ trains
a year already pass through existing railways
from China to Europe.
“The amount of disruption to that from an
earthquake in say, Kazakhstan or Uzbekistan,
could be economically catastrophic,” he
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