PartnerRe’s ‘pure play’ advantage
PartnerRe’s strategic decision to
operate as a “pure play” reinsurer,
together with its private ownership
model, means it is well positioned to grow
in what it calls a transitioning market,
Emmanuel Clarke president & chief executive
officer, PartnerRe, told Monte Carlo Today.
With markets and segments responding to
loss activity in recent years, he said he remains
optimistic about the future of reinsurance as
a whole—and about PartnerRe’s positioning
within the market.
One additional consequence of the heavy
cat losses along with attritional loss activity
the industry has experienced in the past
two years has been that many cedants have
rediscovered the value of reinsurance, he said.
They are increasingly concerned about
emerging risks such as cyber and climate
change—and want to work with their
reinsurers to manage these better.
“We see more risk, risk development, the
effects of climate change, the development of
cyber and the transformation of the industry
that will lead to more risk and risk transfer,”
“We see a continued distaste for volatility
from our cedants. Insurance companies are
very eager to maintain low volatility.”
PartnerRe has all the tools to help deliver
these solutions, Clarke said. He said it has
scale and significant financial strength—
something validated when it was upgraded by
AM Best in August to ‘A+’ from ‘A’.
He said private ownership was a better
model for a reinsurer, because of the longterm
nature of the reinsurance relationships
and the focus on long term economic value
growth, undistracted by short term optics.
He discussed the fact that PartnerRe is a
pure reinsurance company, unlike many of its
rivals which also write insurance business, as
being central to its offering.
According to Clarke, writing insurance
as a business requires scale and writing
reinsurance requires relevance—and few
companies are able to marry these two
“It is a deliberate choice on our part to be
‘pure’,” said Clarke. “We do not compete with
our clients and this allows us to concentrate
“That is a very different business model
from insurance. All the folks who have tried
to lead the two business models, have always
been challenged on execution. That’s a clear
differentiation, and that has allowed us to
focus on two things in particular: relevance
“Every company wants to be those two
things, but it’s the degree to which you can be
relevant and agile.
“We believe that we have the size that is
big enough to matter in terms of relevance,
but small enough to keep that nimbleness
and agility to make the right choices,” he
Evolving cyber threat means historical data of limited use
The pace of change in cyber risks
means a forward-looking approach
is essential, as historical data has
“You can’t just look at the rear-view mirror
to understand this risk, you need to come
up with new approaches,” Pascal Millaire,
chief executive of CyberCube, told a press
conference at the Monte Carlo Rendez-Vous.
“How can insurers and reinsurers gain access
to a forward-looking view of risk? It’s certainly
not by looking at historical data alone.”
Millaire said hard data could be helpful,
but he pointed to the value of experts in
predicting what events will impact insurers
and reinsurers over the next 12 months.
Another important factor, he said, was
thread intelligence, which includes an
understanding of the perpetrators of cyber
attacks. He stressed the importance of
CyberCube press conference
combining the various approaches, although
the methodologies would sometimes come
up with very different results.
CyberCube and Guy Carpenter recently
published the findings of a report that
analysed 23 catastrophe loss scenarios,
ranging from attacks on critical infrastructure
to breaches affecting the cloud environment.
The report said the biggest potential loss
value generator was widespread data loss
from a leading operating system provider,
estimating the loss for this at $23.8 billion.
However, it added that the likelihood of this
occurring was the lowest of the scenarios
it had examined, as it was likely to be less
frequent than once in 300 years.
The next biggest loss, at $22.2 billion, was
from large-scale data loss from a cloud service
“Ransomware will continue to be
significant,” Mike Rogers, a director of
CyberCube, told the briefing.
“You’ve seen ransomware mostly targeting
data. One of the things that worries me is
ransomware as a tool attacking continuity of
Rogers joined CyberCube last year after
a 37-year career in the military. He served as
director of the National Security Agency and
commander of the US Cyber Command.l
Monte Carlo Today Day 4 Wednesday September 11 2019